42^nd GST Council Meeting

Confidential

Agenda for

42^nd GST Council Meeting

5 October 2020

Volume – 2

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File No: 547/42^nd GSTCM/GSTC/2020

GST Council Secretariat

Room No.275, North Block, New Delhi

Dated: 11^th September 2020

Revised Meeting Notice for the 42^nd Meeting of the GST Council scheduled on 5^th October 2020

The undersigned is directed to refer to the subject cited above and to say that the 42^nd Meeting of the GST Council will be held on 5^th October 2020 as follows:

Monday, 5^th October, 2020 : 1100 hours onwards

2. The agenda items for the 42^nd Meeting of the GST Council will be communicated in due course

of time.

3. Please convey the invitation to the Hon’ble Members of the GST Council to attend the Meeting.

(-Sd-)

(Dr. Ajay Bhushan Pandey)

Secretary to the Govt. of India and ex-officio Secretary to the GST Council

Tel: 011 23092653

Copy to:

1. PS to the Hon’ble Minister of Finance, Government of India, North Block, New Delhi with the request to brief Hon’ble Minister about the above said meeting.

2. PS to Hon’ble Minister of State (Finance), Government of India, North Block, New Delhi with the request to brief Hon’ble Minister about the above said meeting.

3. The Chief Secretaries of all the State Governments, Union Territories of Delhi, Puducherry and Jammu and Kashmir with the request to intimate the Minister in charge of Finance/Taxation or any other Minister nominated by the State Government as a Member of the GST Council about the above said meeting.

4. Chairman, CBIC, North Block, New Delhi, as a permanent invitee to the proceedings of the Council.

5. Chairman, GST Network

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Agenda Items for the 42^nd Meeting of the GST Council on 5^th October 2020

1. Confirmation of the Minutes of GST Council Meetings.

1. 40^th GST Council Meeting held on 12^th June, 2020

2. 41^st GST Council Meeting held on 27^th August, 2020

2. Deemed ratification by the GST Council of Notifications, Circulars and Orders issued by the Central Government

3. Decisions of the GST Implementation Committee (GIC) for information of the Council

4. Timelines in respect of TRAN-1/TRAN-2 declarations based on the discussions of 13^th meeting of IT Grievance Redressal Committee held on 01.09.2020

5. Update on Return Enhancement and Advancement Project (REAP) & in-principle approval of overall architecture

6. Issues recommended by the Law Committee for the consideration of the GST Council

1. Extension of the GSTR-1/3B system of return filing and change in due date for quarterly taxpayers upon introduction of the new GSTR-2B functionality

2. Issues related to Annual Return for Financial Year 2019-20

3. Steps taken to improve compliance behavior of taxpayers for making furnishing of GSTR-1 mandatory before furnishing GSTR-3B

4. Amendment to FORM GSTR-1 and notification 12/2017-Central Tax, dated 28.06.2017 for improving data quality to enhance tax administration

5. Agenda Note regarding refund to be disbursed in same PAN and Aadhaar linked bank account on which registration has been obtained under GST.

6. Proposal for amendments to CGST Rules, 2017

7. Issues recommended by the Fitment Committee for the consideration of the GST Council

1. Agenda Note on the representation received from HADMA seeking GST rate of 12% on Ayurveda/Unani/Siddha’ (AUS)-ingredients based sanitizer

8. Issues of Goods and Services Tax Network (GSTN):

1. Status of receipt of Advance User Charges (AUC) from States and CBIC

2. Need for moving resources from CR model to T&M model for important developments

3. Status update on conversion of Goods and Services Tax Network (GSTN) into 100% Government-owned Company

9. Presentation on proposal to extend levy of GST Compensation Cess beyond the transition period to meet the shortfall during the transition period and constitute a Committee of Officers to work out anticipated shortfall, period of extension and other related issues

10. Review of Revenue position

11. Enabling UPI and IMPS as a payment option for payments of Goods & Services Tax

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12. Status report of creation of GRC Zone-wise (CBIC) and States / UTs as on 04.09.2020

13. Performance Report of the NAA (National Anti-profiteering Authority) for the 1^st quarter (April to June, 2020) for the information of the Council

14. Any other agenda item with the permission of the Chairperson

15. Date of the next meeting of the GST Council

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TABLE OF CONTENTS

	Agenda				Agenda Item			Page
	No.							No.
	5			Update on Return Enhancement and Advancement Project (REAP) & in-principle				9
				approval of overall architecture
				Issues of Goods and Services Tax Network (GSTN)
				i.  Status of receipt of Advance User Charges (AUC) from States and CBIC				15
				ii.  Need for moving resources from CR model to T&M model for important
	8							21
				developments
				iii.  Status update on conversion of Goods and Services Tax Network (GSTN)				24
				into 100% Government-owned Company
				Presentation on proposal to extend levy of GST Compensation Cess beyond the
	9			transition period to meet the shortfall during the transition period and constitute a				–
				Committee of Officers to work out anticipated shortfall, period of extension and other
				related issues  (to be circulated separately)
	11			Enabling UPI and IMPS as a payment option for payments of Goods & Services Tax				31

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Discussion on Agenda Items

Agenda Item 5: Update on Return Enhancement and Advancement Project (REAP) & in-principle approval of overall architecture

It may be recalled that the 28^th GST Council Meeting held on 21^st July, 2018, in regard to the new return system approved the following design principles:

1. Composition dealers and dealers having Nil transaction shall have facility to file quarterly return.

2. All taxpayers shall file one monthly return and return filing dates shall be staggered based on the turnover of the registered person to manage load on the IT system. The B2B dealers would have to fill invoice wise details of the outward supply made by them while the input tax credit would be calculated automatically by the system based on invoices uploaded by his sellers.

3. Based on these the system would automatically calculate his tax liability and Input Tax credit availability.

4. Moreover, as a part of agenda on simplification of returns, it was decided that the benefit of filing quarterly return shall be available to taxpayers with annual turnover of up to Rs.5 crore but they shall pay tax monthly.

1.2. Thereafter in the 39^th GST Council Meeting held on 14^th March, 2020, it was recommended that in order to smoothen the rollout of the new return system, and to ensure a better uptake of the new return, the transition to the new return system may be made in an incremental manner. Accordingly, it was felt that the first need was to match the liabilities declared by suppliers between GSTR-l and GSTR-3B and the second need was to match the ITC of the buyers from the suppliers’ GSTR-l containing his supplies i.e. matching the 2A of the buyer with his ITC declared in 3B. The following roadmap was suggested:-

1. The tax liability would be auto-populated in GSTR-3B from invoice wise details filed by him in GSTR-l. The same shall be editable upto a small margin say 10% which could be made eventually uneditable for downward revision. Meanwhile, gaps between liability auto-populated and liability furnished may be generated as MIS / comparison report.

2. A new statement GSTR-2B to be introduced as an auto-drafted ITC statement that provides credit on the basis of the GSTR-1s filed by the taxpayers between due date of filing of GSTR-1 of the previous month (11^th) to the due date of GSTR-1 of the current month (11^th). The ITC in GSTR-2B shall be auto-populated in GSTR-3B. The same shall be editable upto a particular threshold.

1.3. Accordingly, various improvements to the return filing system are being carried out by GSTN in the common portal as a part of the Return Enhancement and Advancement Project (REAP). As a part of this project, the following steps were envisaged for incremental improvement and integration of the GSTR-1/2/3 and the proposed new return system, into the currently available GSTR-1/3B system of return filing:

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Already in Production:

Project Name	Linkage with existing return model.
Auto-population of liabilities from	This is to build in the functionality of GSTR-1/2/3 and
	the new return system, wherein the details of outward
GSTR-1 to GSTR-3B for Monthly
	supplies from GSTR-1 or ANX-1 were auto-populated in
Taxpayer
	GSTR-3 or GST RET-1 directly.
	This  is  to  reduce  the  compliance  burden  of  small
Nil filing of GSTR 3B and GSTR-1	taxpayers (20 – 22 lac taxpayers) as well as to reduce the
via SMS	load on the system. This was part of the new return
	system also.
	In the new return system, all invoices, credit notes, debit
	notes etc. uploaded by any supplier in his ANX-1 by the
	10th  of the next month were auto-populated in the next
	open ANX-2. Similarly, GSTR-2B has been introduced
Documents  considered  for  ITC	where irrespective of the date of invoices, all GSTR-1s
	filed by the 11th of the month are auto-populated in the
computation for the month based on
	month’s GSTR-2B.
Cut-off date (GSTR-2B)
	This also ensures that input tax credit on only those
	invoices is passed which has been filed by their supplier
	in  GSTR-1.  This  is  crucial  for  auto-population  and
	locking of ITC in GSTR-3B.
	Import data was to be auto-populated in ANX-1 / ANX-
	2 from ICEGATE system. This was to be accepted /
Import  data as  part  of  GSTR-2A	pending / rejected by the taxpayer and the same was to
download  and  GSTR-3B  Auto-	be auto-populated in GST RET-1. The same facility has
population	now  been  provided  with  import  data  being  auto-
	populated in GSTR-2A and 2B and the same being auto-
	populated from GSTR-2B to GSTR-3B.
Delinking of credit/debit notes with	Law was amended vide GST (Amendment) Act,2018 –
	GST w.e.f 1.02.2019. The same was to be provided as
invoices in GSTR-1 and its impact
	part of (ANX-1) new return model. It has been provided
on refunds etc.
	in GSTR-1 also now.
	Law was amended vide GST (Amendment) Act,2018 –
Delinking of credit / debit notes from	GST w.e.f 1.02.2019. The same was to be provided as
invoices in GSTR-6.	part  of  the  (ANX-1)  new  return  model.  It  has  been
	provided in GSTR-6 also now.
Providing detail of invoices considered	This  is  a  useful  tool  for  taxpayers  to reconcile their
for computation in table 8A of GSTR-	GSTR-2A data with credit taken by taxpayers in GSTR-
9	3B.

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	This was to be developed as part of the new return system
	where a tool was to be provided to match invoices auto-
Matching  Tool  for  GSTR-2B  and	populated  in  ANX-2  with  purchase  register  of  the
purchase register	taxpayer. The logic developed and approved for ANX-2
	has been incorporated in the matching tool for GSTR-2B
	and purchase register.
Enhancement of existing comparison	Reports on liability auto-populated on the basis of GSTR-
report of auto-drafted and filed values	1 and filed by the taxpayer in GSTR-3B were available
for GSTR-3B	before also. These have been further enhanced after auto-
	population of GSTR-1 to GSTR-3B and introduction in
	GSTR-2B.

Under Development : –

Auto-population of ITC from GSTR-	In the new return system taxpayers were required to accept
2B in GSTR-3B	/ reject / keep pending invoices on which credit was to be
	availed from ANX-2 to GST RET-1. However, if no action
	was  taken by the taxpayer  all  credit  was  accepted by
	default. Similarly, credit from GSTR-2B (auto-drafted ITC
	statement on the basis of GSTR-1s filed) is now being
	auto-populated in GSTR-3B.
Communication  channel  between	The new return system envisaged an accept, pending,
buyer and supplier	reject   system   of   invoices   where   taxpayers   were
	communicating through ANX-2 and ANX-1. Further, a
	communication  channel  was  also  to  be  provided  for
	recipient to report errors or invoices which have been
	wrongly  uploaded  against  a  particular  recipient.  This
	communication  tool  will  now  be  provided  as  an
	independent  tool  for  all  recipients  to  report  missing
	invoices to their suppliers.

2.1 In this regard, it may kindly be recalled that one of the features approved as part of new return system (SAHAJ and SUGAM returns) was a facility of quarterly returns for taxpayers having aggregate turnover below Rs. 5 Crore with monthly payment (QRMP). The proposed category of taxpayers were to file quarterly return and monthly payment in FORM PMT-08. This was an important facility which was being given to small taxpayers considering that it would provide relief to 89% of the taxpayer base who have turnover less than Rs. 5 Crore. Also, this will considerably decrease the number of returns and the associated compliance burden for small taxpayers.

2.2 Accordingly, a Quarterly Return and Monthly Payment Scheme for registered persons having turnover up to Rs. 5 Crore is proposed to be introduced with a slightly modified approach based on existing return system itself. As approved by the council earlier in this regard, under the proposed approach also such registered persons will have option to file quarterly GSTR-1 and GSTR-3B. Payment of tax for month M1 and M2 of the quarter will be through normal challan PMT-06 representing their liability (net of ITC) for the month. The salient features of the proposed scheme are as follows:

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A. Features in respect of Selection of Option:

1. FORM QR-OPTIN will be provided for opting for the scheme. The same form would be used for opting out and again opting in for the scheme.

2. All taxpayers with turnover less than Rs. 5 Crore will have a choice to optin the scheme and thus file their statement of outward supplies (GSTR-1) and tax return (GSTR-3B) quarterly. This return frequency could be different for different distinct persons (different GSTINs on same PAN). Registered persons having Annual Aggregate turnover (AATO) more than Rs. 5 Crore in previous financial year will not be eligible to opt for the scheme.

3. Opting in and Opting out will be made available from 1^st of M2 of Q-1 to 31^st of M1 of Q-2 i.e. for 90 days from the second quarter of the launch of the scheme. For the first quarter, the option will be made available from 10^th of December 2020 to 31^st January 2021.

4. Last period (monthly / quarterly) GSTR-3B has to be filed in the system for any person to be eligible to enter the scheme. The system for defaulting taxpayers from 1^st of December 2020 will check if return for October 2020 has been filed or not.

5. New Registrations and those who are opting out of the composition scheme (if eligible) may opt-in to the scheme in the middle of the quarter also.

6. When a taxpayer’s cancellation is revoked, he will be revoked to the original selection of monthly or quarterly as per his status when the registration was cancelled.

7. When the facility is introduced for the first time, it is proposed that the taxpayers with turnover up to Rs. 5 Crore and who have already filed their returns in FORM GSTR-3B may be migrated into the quarterly scheme. Taxpayers will be given prior communication about this default migration and will be given adequate time and option to opt out of QRMP scheme. It may also be noted that taxpayers having turnover up to Rs. 1.5 Cr who have opted for monthly filing of GSTR-1 will not be automatically migrated to the new scheme. However, they too will be given adequate time and the option to opt for quarterly.

B. Payment to be made in M1 and M2:

1. Once opted in the scheme, the registered person would need to estimate his liability (net of Input tax credit) for month M1 and M2 and make payment through challan in FORM PMT-06. The taxpayers who do not want to estimate their liability would have the option to generate a pre-filled challan for a fixed amount based on their average monthly tax liability in the preceding quarter (say 30 or 35% of their net cash liability declared and paid in the preceding quarter as declared in GSTR-3B) and make payment of tax for M1 and M2.

2. After month M3 the return for the entire quarter shall be filed and cash liability net of amount already paid for M1 and M2 shall be discharged.

3. Cash ledger refund in month M1 and M2 for any quarter shall not be allowed to be refunded in cases where taxpayers have opted in for this scheme.

4. If no payment has been made in M1 and M2, it would be presumed that sufficient balance is available in cash ledger or in the credit ledger of the registered person. Interest at applicable rate would be payable if the balances are not found to be sufficient to cover the liability declared in the quarterly return.

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5. FORM PMT-06 to be amended to include reason for filing of challan so that it is known when the amount is being deposited that it is meant for the M1 or M2 of a quarterly return filer.

C. Treatment of Late Fee and interest for M1 and M2:

1. Interest would be payable for M1 and M2, if the liability of M1 and M2 is paid in M3 or later. However, this interest would be self-assessed and not calculated by the system.

2. No interest would be payable where the taxpayer opts for discharging liability by the due date at fixed amount (say 30 or 35% of their net cash liability declared and paid in the preceding quarter as declared in GSTR-3B) as provided in the rules (say in M1) and later it is found that in the Month M1 the liability was higher, provided they discharge their entire liability in GSTR-3B of the quarter.

3. Interest would be applicable if liability (either self-assessed of fixed sum) for each month is discharged beyond the due date; but late fees would be applicable only where the quarterly return is furnished beyond the due date.

D. Invoice Filing Facility (IFF):

1. Small taxpayers who avail this facility would automatically be shifted to quarterly GSTR-1 filing. However, they may have difficulty supplying to large organized taxpayers or to exporters as such recipients reportedly demand that the invoice be reported (filed in a IFF / GSTR 1QM) by the supplier on monthly basis.

2. To mitigate this hardship forcing such small taxpayers to not to opt for quarterly filing, an invoice filing facility (IFF) would be provided so that these quarterly return filers are able to upload and file those invoices in month M1 and M2 itself for those recipients who so demand. Such filing facility would be available up to a cut-off date and credit would flow to the buyer after the cut-off date on filing of the IFF. Invoices reported/filed once in either M1 or M2 shall not be required to be reported/filed when GSTR 1 for the quarter is filed. However, invoices which are uploaded in IFF but not filed will be purged on the cut-off date and would need to be reported in the quarterly GSTR-1

3. This facility is proposed to be made available from 1^st of January, 2021 and till such time the present design of filing of GSTR 1 only in M4 shall continue for those taxpayers who avail this QRMP facility.

4. All liability from IFF of M1 and M2 and that from GSTR 1Q shall flow to one GSTR 3B for the quarter. Till it gets developed, the filing of quarterly GSTR 3B shall be based on voluntary assessment of tax.

3. In order to provide for implementation of the said scheme under the legal framework of GST, either of the following two options would be employed:

1. Notify the amendment carried out through the Finance Act, 2019 in section 39(1) and 39(7) of the CGST Act and issue notification under the said section so as to allow monthly payment and quarterly return to a class of registered person having aggregate annual turnover upto Rs. 5 Crore; or

2. The QRMP scheme be notified as special procedure under section 148 of the CGST Act. Further, in order to implement the proposed Invoice Filing Facility (IFF) scheme, amendment in rule

59. of the CGST Rules, 2017 would need to be carried out.

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4. In this regard it is pertinent to mention that since returns would be filed quarterly by a class of registered person, IGST settlement may be required to be made on ad-hoc basis for M1 and M2. However, settlement of 90% of the tax (paid by monthly taxpayers) will continue as of now.

5. Accordingly, proposal to introduce a revised approach to quarterly return with monthly payments for small taxpayers is placed before the GST Council for in-principle approval of the scheme. Relevant notifications and amendment in CGST Rules would be drafted by the Law Committee in consultation with the Union Ministry of Law and Justice.

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Agenda Item 8: Issues of Goods and Services Tax Network (GSTN)

Agenda Item 8(i): Status of receipt of Advance User Charges (AUC) from States and CBIC Background

As per the Revenue Model of GSTN approved by the Empowered Committee of State Finance Ministers (EC) in its meeting held on 30^th August 2016 (copy attached as Annexure-I), the GST System Project is being implemented by GSTN as per approval of the Cabinet and the cost incurred on the project (Capex and Opex) along with GSTN’s own expenses is to be shared equally by the CBEC (now CBIC) and States in the form of User Charges to be remitted by them in two (2) instalments in a Financial Year on a half-yearly basis by 1^st March and 1^st September of the year.

Status of pending Payment of AUC as on 29^thSeptember2020

2. As per the approved Revenue Model, GSTN had raised demand for the payment of AUC to the Central and State Governments for the 2018-19, 2019-20 and 2020-21. The status of AUC pending as on 29^th September is under:

							(Rs.in Crores)
	Financial Year				Amount		Detail of Pending States
					Pending
	2018-19 – 1st& 2nd Instalment
					14.46		As per Annexure -II
		– 1st& 2nd Instalment					As per Annexure -II
	2019-20				8.45
		– 1st Instalment					As per Annexure -II
	2020-21				98.80
		– 2nd Instalment					As per Annexure -II
	2020-21				289.34
	Total
					411.04

The Advance User Charges of FY 2018-19 is received from all States and Centre, except the states of Punjab and Telangana. GSTN has been following up for the same with the concerned states.

1. Further, the follow up for Advance User Charges of FY 2018-19 and 2019-20 is also being made continuously, including by way of informing the status to the GST Council. Agenda has been placed before the GST Council for the Status of Advance User Charges, wherein the amount received and pending from States is informed.

2. Further, the first instalment of Advance User Charges for FY 2020-21 is payable by 1^st June 2020 and second Instalment is payable by 1^st October 2020. However, in view of the current situation, few states have expressed concerns that they may not be able to release funds to GSTN within specified time, and have requested for extension of time without interest.

Proposal:

3. Keeping into consideration the above facts and to settle the dues timely, the following is proposed before the Council:

1. The States and UTs who have not yet paid the AUC for FY 2018-19 and 2019-20 may be asked to pay their due at the earliest.

2. Extension of time for Advance Users Charges (AUC) of FY 2020-21 (both 1^st and 2^nd instalments) payment to 31^st March 2021, without levying any interest, if the payment is made on or before this extended date.

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Annexure 1

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Annexure II

Goods and Services Tax Network

																			(Rs. in
																			crores)
Status of Pending Advance User Charges till FY 2020-21 as on 17.09.2020
							User
							Charges to			User			User Charges			User Charges			Total User
	Sl.			CENTRE/STA			be			Charges to			to be			to be			Charges to
	No.			TE/ UT			Collected			be			Collected for			Collected for			be
										Collected			FY 2020-21			FY 2020-21			Collected
							for FY
										for FY			(1st			(2nd			till FY
							2018-19
										2019-20			Instalment)			Instalment)			2020-21
1				CBIC		–			–			–			132.22			132.22
2				Maharashtra		–			–			–			22.17			22.17
3				Uttar Pradesh		–			–			–			18.15			18.15
4				Gujarat		–			–			12.33			12.33			24.66
				Delhi
5						–			–			11.76			11.76			23.52
6				Tamil Nadu		–			–			11.31			11.31			22.62
7				West Bengal		–			–			9.79			9.79			19.58
8				Rajasthan		–			–			–			9.15			9.15
9				Karnataka		–			–			9.12			9.12			18.24
10				Madhya Pradesh		–			–			5.76			5.76			11.52
11				Telangana		4.81			7.61			5.55			5.55			23.52
12				Bihar		–			–			5.36			5.36			10.72
13				Haryana		–			–			5.22			5.22			10.44
14				Punjab		9.53						4.90			4.90			19.33
15				Andhra Pradesh		–			0.35			4.55			4.55			9.45
16				Kerala		–			–			3.76			3.76			7.52
17				Odisha		–			–			–			3.62			3.62
18				Assam		–			–			2.89			2.89			5.78

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19	Jharkhand	–	–	2.47	2.47	4.94
20	Uttarakhand	–	–	–	2.15	2.15
21	Chhattisgarh	–	–	1.78	1.78	3.56
	Himachal
22	Pradesh	–	–	1.45	1.45	2.90
	Jammu &
23	Kashmir	–	–	–	1.45	1.45
	Chandigarh
24		–	–	–	0.44	0.44
25	Meghalaya	–	–	–	0.33	0.33
26	Goa	–	–	–	0.32	0.32
27	Puducherry	–	–	–	0.32	0.32
28	Others *	0.12	0.49	0.80	1.02	2.42
Tota
l		14.46	8.45	98.80	289.34	411.04

• it includes Arunachal Pradesh 0.68, Manipur 0.36, Dadra & Nagar Haveli 0.45, Nagaland 0.11, Sikkim 0.27, Daman & Diu 0.20, Andaman & Nicobar 0.16, Mizoram 0.12, Tripura 0.04 and Lakshadweep 0.03

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Agenda Item 8(ii): Need for moving resources from CR model to T&M model for important developments

The proposal of Software development under actual identified resources utilization, commonly known as Time and Material (T&M) basis, to implement the changes identified under Roadmap for incremental improvements to existing Returns (Linking of GSTR-1/GSTR-2A/2B with GSTR-3B) was placed before the GST Council in its 39th meeting held on 14th March 2020. Consequently, Council approved the proposal of incremental enhancement of existing Returns on a T&M basis starting with 60 personnel to carry out development. GSTN also approved 30.5 resources under T&M model for critical changes of Back office, Front Office and Registration module of GST System, which has been named LEAP Project. These are not really additional resources being paid for but movement of resources from normal CR model of change implementation to T&M model of change implementation.

2. The main difference in T&M model and normal CR model is that in T&M model payment is calculated in terms of man-days of resources identified which are deployed exclusively for the project. It is for GSTN to closely monitor the running of the project and ensure that the manpower is fully utilised. At present GST, which is fast evolving law, needs this agile mode of IT development under T&M model. GSTN is now experienced enough to use T&M model of development and deliver projects faster. In CR model payment is made for individual CR and effort is estimated for each step in the development and payment is made for effort in the development. Huge time gets spent on estimation of efforts and then designing with to and fro movement between GSTN and Infosys till agreement is arrived at the effort estimation.

3. GSTN and Infosys started T&M model in the month of April for changes in Returns and related CRs and named this as REAP (Return Enhancement and Advancement Project. Progress of REAP team under T&M is mentioned in Annexure-1.

4. Time Analysis between Regular Process (Non T&M) and T&M Process : GSTN had defined a change Management (CR) Process with a method level Estimation Framework for various components and various approval checkpoints that are prerequisite to start develo0ment of the change request. This process has 6 stages (defined below). However Time and material (T&M) model have 4 stages only. This saves time and improve turnaround time along with documentation is also reduced. To analyse implication of T&M model, 10 changes of similar magnitude were compared under two models and it appears that in T&M model the delivery time for project is much shorter and generally in 3+ months important changes can be implemented which used to take 9+ months earlier under CR model.

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Current Process as per Change Management involves six stages and intermediate negotiations.

Change Management which includes TFD under T&M involves 4 stages and needs close monitoring of project implementation.

BRD	TFD	Development and	Deploy to UAT
•Finalize Business	•Techno Functional	RT	•UAT Testing
requirement	DOcument	•Development
	submitted By	/RT/UAT Sanity
	Infosys)

5. It is suggested that following changes be implemented under T&M model

1. QRMP( Quarterly Return Monthly Payment).

2. ITC control and spike rules.

3. High Priority CRs such as blocking e-way bill above to 5 cr.

4. All stages of Aadhar validation etc along with other critical BO/FO/Registration changes as decided by government.

5. Validation of bank account in which refund flows.

6. Any other change marked urgent by the Law Committee.

6. Approval requested from the GST Council:

1. It is proposed that the methodology of getting the work done on T&M basis, would be followed for developing above mentioned changes [para 5, cl (i) to (vi)] along with other critical changes which has direct impact on revenue.45 resources (30 in REAP and 15 in LEAP Project) starting form 1^st Oct 2020 till 30^th June 2021 would be utilised for the same over and above the existing resources.

2. Extension of REAP & LEAP Projects with existing resources from 1^st Oct 2020 till 30^th June, 2021.

Page 22 of 31

Annexure 1

Progress under REAP (Return Enhancement and Advancement Project)

RQM Brief Description

Prod

Deployment

Date

Remarks

17074	Auto-population of liabilities from GSTR-1 in GSTR-3B for		03-09-2020	In Production
	Monthly Taxpayer
17073	Nil filing via SMS for GSTR 3B		04-06-2020	In Production
17052	Delinking of credit/debit notes with invoices in GSTR-1		13-09-2020	In Production
17192	Documents considered for ITC computation for the month		28-08-2020	In Production
	based on Cut-off date (GSTR-2B)
17131	Auto-population of import of goods data in GSTR-2A		26-08-2020	In Production
17096	Nil filing via SMS for GSTR 1		30-06-2020	In Production
17152	Impact of credit/debit note delinking on other modules		26-08-2020	In Production
17159	Matching Tool for GSTR-2B and purchase register		13-09-2020	In Production
17164	Delinking of credit / debit notes from invoices in GSTR-6		03-09-2020	In Production
17342	Providing detail of invoices considered for computation in		16-08-2020	In Production
	table 8A of GSTR-9
17153	Enhancement of existing comparison report		21-08-2020	In Production
RQM	Description of other important changes	Remarks
16697	API for BHIM to enable Flow based Lending	Completed
17591	Facility to create Vendor Master /HSN	shifted due to QRMP, will be
		deployed on 28-01-2020
17786	Importing e-invoice data into GSTR-1 (Part 3 & 4)	In Development
18164	E-Invoice Look-up System (Part 1 & 2 )	In Development
17143	Communication of channel	In Development

Page 23 of 31

Agenda Item 8(iii): Status update on conversion of Goods and Services Tax Network (GSTN) into 100% Government-owned Company

1. The GST Council in its 27^th Meeting held on 4^th May 2018 decided that GSTN will be converted into a 100% Government-owned entity by transferring 51% equity shares held by the Non-Government institutions to the Centre and states equally.

2. The Union Cabinet in its Meeting held on 26^th September 2018 has approved the proposal and the present status of conversion of GSTN into 100% Government-owned Entity in terms of ROC/MCA Compliance Check list/Action plan is enclosed as (Annexure-1).

3. In this regard in the 39^th GST Council Meeting held on 14-03-2020 at Agenda item 11(vii), the following points were discussed:

1. As on the date of the meeting, the State Governments of Tamil Nadu, Sikkim and Chhattisgarh had not yet communicated their acceptance and thereafter need to make the payment for share transfer in their favour.

2. The Central Government and 16 other State Governments who have accepted the proposal, were requested to make payment of their respective share purchase consideration and execute necessary documentations including Shareholders’ Agreement and send the same to GSTN in order to expedite the matter of conversion of GSTN.

The GST Council took note of the above said status and directed the GST Council Secretariat to issue necessary advisory / direction to all the concerned in order to complete the transaction at the earliest.

4. Thereafter the matter has been followed up by GSTN and later by GST Council Secretariat vide letter No.F.119/39^th GSTCM/GSTC/II/2020 dated 18.06.2020 vide which the remaining States were requested to make payment of their respective share purchase consideration and execute necessary documents including Shareholders’ Agreement and send the same to GSTN in order to expedite the matter of conversion of GSTN.

5. As on 16-09-2020 the Union Government and 24 States / UTs have paid the amounts and 07 States have yet not made the payment (Annexure-2).

6. After the payment to the non-Governmental institutions for the shareholding by above mentioned 07 States, following processes are required to be done to convert GSTN into 100% Government-owned entity.

1. Obtain duly executed (by Centre/States/UTs/Non-Govt. Institutions) instrument of transfer of shares in the prescribed form i.e. SH-4 with transfer fees from Non-Government Institutions in favour of Centre/States/UTs and executed Shareholders Agreement in desired manner to make shareholding 50:50 (Centre & States/UTs).

2. GSTN to convene Board Meeting to approve the following proposals:

1. To register the transfer of shares from EC & Non-Government Institutions to Centre, State Governments & UTs in the desired shareholding and issuance of share certificates to Centre, State Governments & UTs (Transferees).

Page 24 of 31

2. To reconstitute the Board (Appointment & Resignation of Board Members).

3. To adopt altered AOA applicable for Govt. Company.

Hence, there is an urgency to complete the process as early as possible.

7. Following are placed before the Council for its information and directions:

1. The present status of conversion of GSTN in to 100% Government-owned entity.

2. The 07 States as listed in (Annex-2) may be requested to make payment of their respective share purchase consideration and execute necessary documentations including Shareholders’ Agreement and send the same to GSTN in order to expedite the matter of conversion of GSTN.

Page 25 of 31

Annexure-1

Status of conversion of GSTN into 100% Govt. Owned Entity ROC/MCA Compliance Check List/ Action Plan

Cause of Action: Decision of GST Council’s to increase Government Ownership in GSTN to 100% (50% with Union Government and 50% jointly with State Governments). (4^th May, 2018)

Follow up Steps:

S.	Steps			Responsibility with	Status/tentative
No.					Timelines
1.	Decision  of  Union  Cabinet  to  increase			DoR	Completed
	Government  Ownership  in  GSTN  to  100%				(26th Sept, 2018)
	(50% with Union government and 50% jointly
	with State Governments).
2.	GSTN to review the provisions of existing			GSTN	Completed
	AOA in order to insert the enabling provisions				(5th Dec., 2018)
	to facilitate the transfer of shares from Non-
	Govt. Institutions to Union Government and
	State Governments and incorporate suitable
	changes   as   per   the   provisions   of   the
	Companies Act, 2013 as per decision of GST
	Council and Union Cabinet.
3.	GSTN to review the provisions of existing			GSTN	Completed
	MOA in order to incorporate suitable changes				(5th Dec., 2018)
	as per the provisions of the Companies Act,
	2013  as  per  decision  of  GST  Council  and
	Union Cabinet.
4.	Obtain  In-principle  approval(s)  from  GST			GSTC Secretariat/DoR	Completed
	Council/DoR on the modified AOA & MOA.				(22nd   Dec,	2018
					GSTC)(7th	Jan,
					2019 DOR)
5.	On receipt of In-principle approvals from GST			GSTN	Completed
	Council/DoR,	GSTN   to	convene   Board		(28th Feb, 2019)
	Meeting  to  approve  the  proposal  including
	changes to be made in MOA & AOA.
6.	To make an application with ROC/MCA e-			GSTN	Completed
	Form  GNL-1	for  approval	on  alteration  of		(7th March, 2019)
	MOA & AOA of GSTN under Section 8, 13
	and 14 of the Companies Act, 2013.

Page 26 of 31

7.	Obtain approval from ROC/MCA on alteration						GSTN	Completed
	of MOA & AOA of GSTN under Section 8, 13							(22nd	March,
	and 14 of the Companies Act, 2013.
								2019)
8.	The exact number of shares to be acquired by						GSTC Secretariat/DoR	Completed
	the   each		Centre/States/UTs   from			Non-		(22nd	Dec,	2018
	Government Institutions.
								GSTC)
								(7th	Jan,	2019
								DOR)
9.	Obtain	request   Letters   from   Non-Govt.					Non- Govt. Institutions	Completed
	Institutions for split of share certificates in the							(11th Feb, 2019)
	desired denominations.
10.	GSTN to convene Board Meeting to approve						GSTN	Completed
	the following proposals:							(17th May, 2019)
	a)	In-principle approval for transfer of
		shares from EC & Non-Government
		Institutions		to	Centre,	State
		Governments & UTs.
	b)	In-principle  approval  for  change  of
		ownership structure.
	c)	Approve  notice  of  calling  General
		Meeting of shareholders for approval
		on  alteration  of  MOA  &  AOA,
		transfer  of  shares  and  change  of
		ownership.
	d)	Approve the split of share certificates
		of  Non-Govt.  Institutions				in  the
		desired proportion in compliance of
		Section  46  of  the  Companies  Act,
		2013  read  with  Companies  Share
		Capital & Debentures, Rules, 2014.
11.	GSTN	to  convene  General  Meeting  of					GSTN	Completed
	shareholders		to	approve	the   following			(21st June, 2019)
	proposals:

1. In-principle approval for transfer of shares from EC & Non-Government

Institutions to Centre, State Governments & UTs.

2. In-principle approval for change of ownership structure.

3. Approval of Alteration in MOA & AOA.

Page 27 of 31

12.   Pass Special Resolution(s) at General Meeting							GSTN	Completed
for approval of Alteration in MOA & AOA,								(21st June, 2019)
transfer  of  shares,  change  of  ownership
structure of GSTN.
13.   File e-Form MGT-14 (Filing of Resolutions							GSTN	Completed
and agreements to the Registrar under Section								(24th June, 2019)
117) with the Registrar along with the requisite
filing within 30 days of passing the special
resolution, along with given documents.
14.   Obtain approval from ROC/MCA for e-Form							GSTN	Completed
MGT-14.								(24th June, 2019)
15.   Consideration   shall   be   paid   by   the							Centre/States/UTs/Non-	In process
Centre/States/UTs  to  the					Non-Government		Govt. Institutions.	(Status		Report
Institutions basis shares to be acquired.
								for	Fund		is
								attached			as
								Annex-1)
16.   Obtain			duly	executed		(by	Centre/States/UTs/Non-	The execution of
Centre/States/UTs/Non-				Govt.  Institutions)			Govt. Institutions.	SH-4 will be done
instrument  of  transfer  of  shares  in  the								post	receipt		of
prescribed form i.e. SH-4 with transfer fees								funds	by	Non-
from Non-Government Institutions in favour								Government
of	Centre/States/UTs				and	executed		Institutions.
Shareholders Agreement in desired manner to
make   shareholding   50:50   (Centre   &
States/UTs).
17.   GSTN to convene Board Meeting to approve							GSTN/  GST  Council	The		Board
the following proposals:							Secretariat	Meeting			of
	a)  To register the transfer of shares from							GSTN			will
								convened			post
		EC & Non-Government Institutions to
								completion of the
		Centre, State Governments & UTs in
								above exercise.
		the desired shareholding and issuance
		of share certificates to Centre, State
		Governments & UTs (Transferees).
	b)	To	reconstitute		the	Board
		(Appointment & Resignation of Board
		Members).

3. To adopt altered AOA applicable for Govt. Company.

Page 28 of 31

				Details of Share Transfer of GSTN
S. No.	Transferee	Transferor’s Share	Distinctive	Distinctive	Non Government	Nos. of	New	Consideration	Aggregate	Transfer	Aggregate
		certificate Number	Number of Shares	Number of	Institution/EC (Transferor)	shares to be	Share	payable for shares	consideration	Duty to	Transfer Duty
			to be transferred	Shares to be		acquired	certificate	@ Rs. 10 each to	payable for	afixed on	to afixed on
			(Lower Limit)	transferred			number	Non-Government	shares @ Rs.	share	share transfer
				(Upper Limit)				Institutions	10 each to Non- transfer form		form (SH-4)
									Government	(SH-4) by	by
									Institutions	Government	Government
										@ 0.25%	@ 0.25%

Page 29 of 31

		7	2,92,501	3,25,000
		16	9,06,787	9,71,429
		38	56,14,694	61,30,611
		44	86,65,062	90,52,000
		5	2,24,251	2,60,000
1	Government of India	14	7,71,037	8,42,143
		36	45,31,266	50,98,775
		40	70,78,612	75,04,244
		3	1,59,251	1,91,750
		12	6,41,751	7,06,393
		34	34,99,430	38,52,286
2	Government of Punjab	34	38,52,287	39,34,576
3	Government of Gujarat	34	39,34,577	40,15,347
		41	75,04,245	75,05,763
4	Government of Odissa	41	75,05,764	75,88,053
5	Government of Jammu & Kashmir	41	76,70,344	77,52,633
6	Government of Maharastra	41	77,52,634	78,34,933
7	Government of Karnataka	35	40,26,535	41,08,824
8	Government of Meghalya	35	41,91,115	42,73,404
9	Government of Bihar	35	42,73,405	43,55,694
10	Government of Nagaland	35	43,55,695	44,37,984
11	Government of Himanchal Pradesh	35	44,37,985	45,20,274
12		35	45,20,275	45,31,265
	Union Territory of Puducherry	42	78,91,184	79,62,482
13	Government of Mizoram	42	79,62,483	80,44,772
14	Government of Uttarakhand	42	80,44,773	81,27,062
15	Government of Haryana	42	81,27,063	82,09,352
16	Government of Assam	42	82,09,353	82,78,122
		6	2,60,001	2,73,520
17		6	2,73,521	2,92,500
	Government of Goa	15	8,42,144	9,05,453
18		15	9,05,454	9,06,786
	Government of Kerala	37	50,98,776	51,79,732
19	Government of Manipur	37	51,79,733	52,62,022
20	Government of Tripura	37	52,62,023	53,44,312
21	Government of West Bengal	37	53,44,313	54,26,602
22	Government of Delhi	37	54,26,603	55,08,892
23	Government of Jharkhand	37	55,08,893	55,91,182
24		37	55,91,183	56,14,693
	Government of Uttar Pradesh	43	82,78,123	83,36,901
25	Government of Madhya Pradesh	43	84,19,192	85,01,481

NSE Investments Limited

LIC Housing Finance Limited

HDFC Limited

HDFC Bank Ltd

ICICI Bank Limited

32,500	NA	3,25,000		812.50
64,643	NA	6,46,430		1,616.08
5,15,918	NA	51,59,180		12,897.95
3,86,939	NA	38,69,390	1,00,00,000	9,673.48	25,000.00
35,750	NA	3,57,500		893.75
71,107	NA	7,11,070		1,777.68
5,67,510	NA	56,75,100		14,187.75
4,25,633	NA	42,56,330	1,10,00,000	10,640.83	27,500.00
32,500	NA	3,25,000		812.50
64,643	NA	6,46,430		1,616.08
3,52,857	57	35,28,570	45,00,000	8,821.43	11,250.00
82,290	58	8,22,900	8,22,900	2,057.25	2057.25
80,771	59	8,07,710	8,07,710	2,019.28	2019.28
1,519	60	15,190	15,190	37.98	37.98
82,290	61	8,22,900	8,22,900	2,057.25	2057.25
82,290	63	8,22,900	8,22,900	2,057.25	2057.25
82,300	64	8,23,000	8,23,000	2,057.50	2057.50
82,290	70	8,22,900	8,22,900	2,057.25	2057.25
82,290	72	8,22,900	8,22,900	2,057.25	2057.25
82,290	73	8,22,900	8,22,900	2,057.25	2057.25
82,290	74	8,22,900	8,22,900	2,057.25	2057.25
82,290	75	8,22,900	8,22,900	2,057.25	2057.25
10,991	76	1,09,910	1,09,910	274.78	274.78
71,299	77	7,12,990	7,12,990	1,782.48	1782.48
82,290	78	8,22,900	8,22,900	2,057.25	2057.25
82,290	79	8,22,900	8,22,900	2,057.25	2057.25
82,290	80	8,22,900	8,22,900	2,057.25	2057.25
68,770	81	6,87,700	6,87,700	1,719.25	1719.25
13,520	82	1,35,200	1,35,200	338.00	338.00
18,980	83	1,89,800	1,89,800	474.50	474.50
63,310	84	6,33,100	6,33,100	1,582.75	1582.75
1,333	85	13,330	13,330	33.33	33.33
80,957	86	8,09,570	8,09,570	2,023.93	2023.93
82,290	87	8,22,900	8,22,900	2,057.25	2057.25
82,290	88	8,22,900	8,22,900	2,057.25	2057.25
82,290	89	8,22,900	8,22,900	2,057.25	2057.25
82,290	90	8,22,900	8,22,900	2,057.25	2057.25
82,290	91	8,22,900	8,22,900	2,057.25	2057.25
23,511	92	2,35,110	2,35,110	587.78	587.78
58,779	93	5,87,790	5,87,790	1,469.48	1469.48
82,290	95	8,22,900	8,22,900	2,057.25	2057.25

Table-A (Funds Paid)

Annexure-2

Page 30 of 31

				Details of Share Transfer of GSTN
S. No.	Transferee	Transferor’s Share	Distinctive	Distinctive	Non Government	Nos. of	New	Consideration	Aggregate	Transfer	Aggregate
		certificate Number	Number of Shares	Number of	Institution/EC (Transferor)	shares to be	Share	payable for shares	consideration	Duty to	Transfer Duty
			to be transferred	Shares to be		acquired	certificate	@ Rs. 10 each to	payable for	afixed on	to afixed on
			(Lower Limit)	transferred			number	Non-Government	shares @ Rs.	share	share transfer
				(Upper Limit)				Institutions	10 each to Non- transfer form		form (SH-4)
									Government	(SH-4) by	by
									Institutions	Government	Government
										@ 0.25%	@ 0.25%
1	Government of Tamil Nadu	41	75,88,054	76,70,343	HDFC Limited	82,290	62	8,22,900	8,22,900	2,057.25	2057.25
		41	78,34,934	78,91,183		56,250	65	5,62,500	5,62,500	1,406.25	1406.25
2	Government of Rajasthan
		4	1,91,751	2,17,790		26,040	66	2,60,400	2,60,400	651.00	651.00
		4	2,17,791	2,24,250		6,460	67	64,600	64,600	161.50	161.50
3	Government of Sikkim	13	7,06,394	7,71,036	HDFC Bank Limited	64,643	68	6,46,430	6,46,430	1,616.08	1616.08
		35	40,15,348	40,26,534		11,187	69	1,11,870	1,11,870	279.68	279.68
4	Government of Andhra Pradesh	35	41,08,825	41,91,114		82,290	71	8,22,900	8,22,900	2,057.25	2057.25
5	Government of Chhattisgarh	43	83,36,902	84,19,191		82,290	94	8,22,900	8,22,900	2,057.25	2057.25
6	Government of Arunachal Pradesh	43	85,01,482	85,83,771	ICICI Bank Limited	82,290	96	8,22,900	8,22,900	2,057.25	2057.25
7	Government of Telangana	43	85,83,772	86,65,061		81,290	97	8,12,900	8,12,900	2,032.25	2032.25
8	Government of Telangana	2	79,626	1,59,250	Empowered Committee	79,625		7,96,250.00	79,625.00	1,990.63
9	Government of Telangana	9	4,83,376	4,83,750	Empowered Committee	375		3,750.00	3,750.00	9.38	2,000.00

Table-B (Funds not paid)

Agenda Item 11: Enabling UPI and IMPS as a payment option for payments of Goods & Services Tax

A request has been received from MD & CEO, National Payments Corporation of India (NPCI) to allow GSTN to formally allow UPI and IMPS as an option for GST payments on the GST portal.

2. A workshop on GSTN – Bank integration organised by GSTN in Dec, 2019 saw participation from member banks, RBI and O/o Pr. CCA. During the workshop, the participants were briefed on transactions flow, integration modalities and other relevant requirements for enabling this option. Member banks were provided with the process document to make necessary development at their end and have the functionalities tested with GSTN in the test environment.

3. Banks are working on the integration and ICICI Bank has completed the development for UPI at its end and also successfully performed test transactions with GSTN in UAT. Confirmation of such readiness has been submitted to GSTN.

4. It has been argued enabling GST payment through UPI will provide tax payers banking with non-authorised GST banks with an instant and interoperable payment option.

5. In view of the reasons explained above, GSTN may be permitted to allow UPI and IMPS as an option for GST payments subject to approval of the GST Council.

6. Accordingly, this agenda is placed before the GST Council for discussion and consideration.

Page 31 of 31