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54th Council Proposes the Removal of GST Rules 96(10), 89(4A), and 89(4B) for Exporters

GST Council Eases Rules for Export Refunds in 54th Meeting

Acknowledging the hardship being faced by the exporters as of restriction concerning the refund on exports, the 54th GST Council Meeting as a trade facilitation measure, recommended omission of Rule 96(10), rule 89(4A) & rule 89(4B) from CGST Rules, 2017 prospectively, where the advantage of the specified concessional/ exemption notifications is taken on the inputs.

The Council explained that regarding reassessments through the jurisdictional Customs authorities, “the IGST paid on exports, refunded to the said exporter shall not be considered to be in contravention of provisions of sub-rule (10) of rule 96 of CGST Rules”.

Restrictions are been levied by the council on refunds through Rule 96(10), rule 89(4A) & rule 89(4B) of CGST Rules, 2017.

Meanwhile, the council proposed Nov 01, 2024, as the enforcement date of Section 128A in CGST Act, 2017 dealing with ‘Waiver of interest or penalty or both relating to demands raised u/s 73, for certain tax periods’.

It was suggested by the council that the issuance of a circular to cite the process and numerous problems pertinent to the execution of newly inserted sections 16 (5) and (6) of the CGST Act.

Also, the council specifies that the past demands would be regularized as is where the basis for the import of service through the branch office, affiliation services, research and development services, transport of passengers by helicopters, film distribution, application fees for furnishing electricity connection, rental charges against electricity meter and others.

The Council on Composite Supply of Services explained that “PLC is naturally bundled with it and are eligible for same tax treatment as the main supply that is, construction service” and “ancillary/intermediate services are provided by GTA, like loading /unloading, packing/ unpacking, will not be treated as composite supply of transport of goods”.

Read Also: Delhi HC: Modification to GST Rule 89(4)(c) is Not Retroactive, Which Caps “Export Turnover” and Restricts Refunds

Concerning the Invoice management system the council specified that the assesses shall be provided the chance to declare their opening balance for these ledgers by Oct 31, 2024.

Clarification on streamlining trade measures by the GST Council

Considering the issue being suffered by the exporters as of the limitation concerning the refunds on the exports, levied vide rule 96(10), rule 89(4A) & rule 89(4B) of CGST Rules, 2017, in cases where advantage of the concessional/ exemption notifications is taken on the inputs, the Council instructed to prospectively omit rule 96(10), rule 89(4A) & rule 89(4B) from CGST Rules, 2017. It will simplify and expedite the procedure for refunds concerning such exports.

The aforesaid suggestions would get notified including the related clarifications via CBIC.

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