Page 44 - GSTL_26th March 2020_Vol 34_Part 4

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GST rates on supply of goods and services — Changes
recommended by GST Council

The 39th GST Council met under the Chairmanship of Union Finance &
Corporate Affairs Minister Smt. Nirmala Sitharaman at New Delhi on 14-3-2020.
The meeting was also attended by Union Minister of State for Finance & Corpo-
rate Affairs Shri Anurag Thakur besides Finance Ministers of States & UTs and
senior officers of the Ministry of Finance.
GST Council took following decisions relating to changes in GST rates on sup-
ply of goods and services.
The recommendation of the Fitment Committee for calibrating the GST
rate structure to correct the inverted duty structure on various items like Mobile
phones, Footwear, Textiles and Fertilizers was placed before the GST Council for
discussion. The Council had a detailed discussion on the matter. Upon discus-
sion the Council made the following recommendations :-
(i) To raise the GST rate on Mobile phones and specified parts present-
ly attracting 12% to 18%.
(ii) To deliberate the issue of calibrating the rate in other items for re-
moving inversion in future meetings with further consultation and
examination of issue.
GST rate on all types of matches (Handmade and other than Handmade)
has been rationalised to 12% (from 5% on Handmade matches and 18% on other
matches). This would address the classification issues. This issue was deliberated
earlier in the 37th Meeting and was pending for decision.
To reduce GST rate on Maintenance, Repair and Overhaul (MRO) ser-
vices in respect of aircraft from 18% to 5% with full ITC and to change the place
of supply for B2B MRO services to the location of recipient. This change is likely
to assist in setting up of MRO services in India. Domestic MRO will also get pro-
tection due to 5% tax paid under Section 3(7) of Customs Tariff Act, 1975 on most
imported goods (sent abroad for repairs) as this tax is not available as credit.
It is proposed to issue notifications giving effect to these recommenda-
tions of the Council on 1st April, 2020.

GST LAW TIMES  26th March 2020  140