47th GST Council Meeting Highlights, Updates, Outcome and More

The 47th GST Council meeting was held on the 28th and 29th of June 2022 in Chandigarh. Union Finance Minister Smt. Nirmala Sitharaman led the meeting while the Union Minister of State for Finance Shri Pankaj Choudhary, alongside Finance Ministers from all States and Union Territories attended the discussion. The meeting mainly covered the topics of taxation.

Moreover, coinciding with the 5th anniversary of GST implementation, the 47th GST Council meeting held major significance regarding key decisions taken. Additionally, the session aimed to simplify the taxation system, rationalize tax rates, and improve previous measures to enhance compliance. Consequently, all of this was done to make the system more user-friendly and efficient.

Furthermore, this blog thoroughly explores the details of the 47th GST Council meeting, providing a complete overview of its key decisions.

Moreover, it explains how these decisions might affect taxpayers, businesses, and the overall Indian economy. Additionally, this analysis allows readers to understand the significant and widespread impact of the 47th GST Council meeting on India’s economic landscape.

Highlights of the 47th GST Council Meeting 

The 47th GST Council meeting yielded several significant decisions:

1. Simplified E-Commerce Compliance

The council approved decisions favoring e-commerce operators and made compliance more convenient for them. Moreover, this allowed composition scheme-registered suppliers to conduct intrastate supplies through these platforms.

2. Ad-hoc Apportionment of IGST

To address pending IGST settlements, the council sanctioned an ad-hoc apportionment of Rs. 27,000 crores, releasing 50% (Rs. 13,500 crores) to the states.

3. GSTR-3B Form Amendments

Amendments to the GSTR-3B form were greenlit, allowing taxpayer reconciliation and decreasing compliance mistakes.

4. Adjustments in GST Rate

The 47th GST Council Meeting brought significant changes to the GST rate structure, reducing rates for items like pulse husks for cattle feed while increasing them for pre-packed and labeled rice.

5. Decriminalization of GST Offenses

Moreover, to encourage voluntary compliance and reduce court burdens, the council decriminalized three GST-related offenses.s.

6. AI/ML-Based Risk Assessment

The council instructed GSTN to deploy AI/ML mechanisms for verifying registration applicants’ backgrounds and monitoring taxpayer behavior post-registration, enabling early detection of non-compliance.

Simplifying the Tax Regime

During the 47th GST Council meeting, officials emphasized that simplifying the tax compliance process is crucial for improving the ease of doing business. It also promotes voluntary compliance among taxpayers. Consequently, the council endorsed various measures to get rid of the administrative burden on taxpayers and streamline tax procedures.

E-Commerce for Interstate Supplies

Additionally, in a notable move to simplify e-commerce compliance, the council granted preliminary approval for suppliers in the composition scheme to conduct intrastate supplies through e-commerce operators (ECOs). This decision aims to ease the compliance burden on small e-commerce sellers and boost their participation in the digital economy.

Ad-hoc Division of IGST

Furthermore, to address the long-standing issue of unsettled IGST, the council approved an ad-hoc allocation of ₹27,000 crores. This initiative seeks to assist states, settle pending IGST claims, ease financial constraints, and enhance fiscal stability.

Amendments in GSTR-3B Form

The council gave the green light to modifications in the GSTR-3B form, a crucial document for taxpayer compliance. These adjustments seek to streamline the reconciliation process, minimize reporting errors, and improve overall compliance.

Measure	Description	Impact
Relaxations in E-Commerce Compliance	Suppliers registered under the composition scheme can make intrastate supplies through e-commerce operators.	Reduces compliance burden on small e-commerce sellers and promotes digital participation.
Ad-hoc Apportionment of IGST	Rs. 27,000 crores of IGST apportioned to states.	Provides relief to states and resolves pending IGST claims, improving fiscal stability.
GSTR-3B Amendments	Simplifies reconciliation process for taxpayers and reduces reporting errors.	Enhances overall compliance and ease of doing business.

These actions mark a noteworthy move in making the tax system more straightforward and fostering an efficient and user-friendly environment for taxpayers.

Rationalizing Tax Rates

Balancing tax efficiency, revenue generation, and fairness is essential in the GST regime’s tax rate rationalization. During the 47th GST Council meeting, officials strategically modified tax rates, addressed anomalies, eliminated inconsistencies, and established a fair and equitable tax structure.

Reduction of GST Rates

The council, in a move to bolster the agricultural sector and boost the utilization of locally produced feed, decided to reduce GST rates from 5% to nil for specific items such as pulse husks for cattle feed. Additionally, it extended the concessional 5% GST on ethyl alcohol to refineries, which were previously subjected to an 18% tax rate for blending with petrol. This adjustment aims to promote the use of ethanol as a biofuel, contributing to environmental sustainability by reducing reliance on fossil fuels and aligning with broader energy transition goals.

GST Rate Hikes

In a proactive measure against tax evasion in specific sectors, the council opted to modify GST rates for certain goods. Notably, the GST rate for pre-packed and labeled rice experienced an increase from 5% to 6%.

Balancing Tax Efficiency and Revenue Generation

The GST Council’s choices regarding tax rate adjustments demonstrate a thoughtful balancing act between the goals of tax efficiency and revenue generation. Reducing rates for specific goods is aimed at encouraging consumption, fostering economic activity, and relieving pressure on specific sectors. Conversely, elevating rates for certain goods is a strategic move to combat tax evasion, create a fair competitive environment, and bolster revenue collection.

Item	Previous GST Rate	Revised GST Rate	Reason for Change
Pulse husks for cattle feed	5%	Nil	Provide relief to the agricultural sector
Ethyl alcohol for blending with petrol	18%	5%	Promote the use of ethanol as a biofuel
Pre-packed and labeled rice	5%	6%	Address tax evasion in the rice industry
Hotel room tariffs below Rs. 1,000	8%	12%	Bring hotel room tariffs under the standard GST rate and improve compliance

Boosting Compliance

Upholding compliance with the GST regime is crucial to realizing its goals of tax efficiency, revenue generation, and equity. The 47th GST Council meeting implemented various measures focused on fortifying compliance and curbing tax evasion.

Decriminalization of Certain Offenses

In a notable initiative to encourage voluntary compliance and alleviate pressure on the legal system, the council removed criminal sanctions from three GST offenses:

• Obstruction of duties of an officer
• Compounding of offenses up to a limit
• The threshold amount of tax for launching criminal offenses

This measure intends to prompt taxpayers to rectify minor errors independently, mitigating the risk of unintentional criminal charges. Additionally, it aims to lessen the judiciary’s workload, enabling a concentration on more severe offenses.

AI/ML-Based Risk Assessment

To improve compliance and detect potential tax evasion risks, the council instructed GSTN to deploy AI/ML-based mechanisms. These mechanisms will be employed to:

• Verify the backgrounds of registration applicants
• Monitor taxpayer behavior post-registration
• Early identification of non-compliant taxpayers

Through the use of AI/ML, GSTN aims to proactively pinpoint potential risks and implement preventive measures, ultimately lowering the occurrence of tax evasion and strengthening revenue collection.

Other Measures to Enhance Compliance

In addition to the aforementioned steps, the council endorsed various initiatives to bolster compliance:

• Streamlining tax procedures and forms
• Intensifying taxpayer education and awareness campaigns
• Enforcing compliance rules more rigorously

These actions underscore a dedication to fortifying compliance and establishing a more just and impartial tax system. By alleviating administrative burdens on taxpayers, offering clear guidance, and implementing robust risk assessment mechanisms, the GST regime aspires to cultivate a culture of voluntary compliance, fostering increased revenue collection and contributing to India’s overall economic growth and stability.

Implications of the 47th GST Council Meeting

The resolutions made during the 47th GST Council meeting are anticipated to exert a noteworthy influence on taxpayers, businesses, and the overall Indian economy. These measures are likely to:

• Facilitate the simplification of tax compliance procedures, alleviating the workload on taxpayers and making the process more accessible and user-friendly.

• Restructure the tax framework, rectifying irregularities to establish a fairer and more balanced tax system that caters to the needs of diverse sectors.

• Strengthen efforts to improve tax compliance, thereby amplifying the collection of tax revenue and contributing to the overall financial health of the nation.

• Foster economic expansion and attract investments by instilling a tax environment that is both stable and predictable, offering businesses a conducive atmosphere for growth and development.

The council emphasizes simplification, rationalization, and compliance enhancement, demonstrating its commitment to creating a tax regime that is both efficient and taxpayer-friendly while fostering growth. Moreover, these measures are expected to positively impact businesses by encouraging investment and driving economic expansion.

Key Outcomes of the 47th GST Council Meeting

• Simplification of the Tax Regime

Anticipated measures such as easing e-commerce compliance, adjusting IGST on a case-by-case basis, and modifying the GSTR-3B form aim to lighten the administrative load on taxpayers and encourage voluntary adherence.

• Rationalization of Tax Rates

Additionally, adjusting GST rates for specific goods—reducing some while increasing others—aims to correct irregularities, enhance tax efficiency, and strengthen revenue collection efforts.

• Boosting Compliance

Overall Impact on Taxpayers, Businesses, and the Economy

The decisions from the 47th GST Council meeting will bring positive outcomes for taxpayers, businesses, and the Indian economy:

Reduced Compliance Burden

Streamlined procedures, clear guidelines, and fewer administrative obstacles will alleviate the compliance burden on taxpayers.

Improved Tax Efficiency

Rationalizing tax rates will address irregularities, stimulate consumption, and enhance overall economic activity.

Enhanced Revenue Collection

Effective compliance measures are expected to curb tax evasion, leading to increased revenue collection.

Promoted Economic Growth

A simplified, efficient, and compliant tax system will cultivate a more favorable business environment, encouraging investment, job creation, and overall economic growth. The 47th GST Council meeting represented a major step forward in India’s indirect tax system. Moreover, its decisions on simplification, rationalization, and compliance enhancement highlight a strong commitment to building an efficient, taxpayer-friendly, and growth-driven tax framework. Consequently, these measures are expected to boost business operations, attract more investment, and stimulate economic growth. As the GST system continues to evolve, stakeholders must stay informed and adapt their practices to ensure compliance and maximize benefits. Also Read: What Is GSTR-3B: Definition, Purpose, And Importance

Additional Thoughts

Here are some additional thoughts on the meeting:

1. Commendably, the council’s focus on simplification and compliance will enhance the user-friendliness of the GST system while reducing the administrative burden on taxpayers.

2. Moreover, the rationalization of tax rates marks a positive step, correcting anomalies and ensuring a fair and balanced tax structure.

3. The adoption of AI/ML-based risk assessment is an innovative strategy to identify potential tax evasion risks, contributing to improved overall compliance.

4. The decriminalization of specific offenses is a favorable step that encourages voluntary compliance and alleviates the burden on the courts.

5. To conclude, the meeting’s outcomes are positive, with the implemented measures expected to positively influence the Indian economy.

Also Read: 46th GST Council Meeting Highlights, Updates, Outcome And More GST And The Use Of Artificial Intelligence (AI)

Conclusion 

Anticipated outcomes from the decisions taken in the 47th GST Council meeting hold promise for positive impacts on Indian taxpayers, businesses, and the overall economy. The council’s strategic focus on simplifying processes, rationalizing tax rates, and improving compliance mechanisms lays the foundation for a tax system that is not only more efficient but also fair and conducive to economic growth.

More Information 

• Official Press Release:

[https://gstcouncil.gov.in/gst-council-meetings](https://gstcouncil.gov.in/gst-council-meetings)

• KPMG Insights:

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