India: Updates In The Run Up To GST Rollout

Last Updated: 21 June 2017
Article by SKP  

The GST Council in its meeting on 3 June 2017 has taken the following decisions:

Anti-Profiteering Committee

  • Draft Rules are under the consideration of the GST Council through which a National Anti-Profiteering Authority may be notified.
  • Authority to have the power to act on receipt of a written application that a registered person has not passed on the reduction in tax rate or Input Tax Credit (ITC) benefit to the recipient.
  • An inquiry by the Anti-Profiteering Authority shall be deemed to be judicial in proceedings and its orders shall be appealable to the High Court.
  • Any order passed by the Committee has to be immediately complied with by the registered person, failing which the officer shall proceed to recover the amount under the provisions of the CGST Act.
  • The Draft Rules would be uploaded in the public domain and after taking the feedback, the Council will consider it for final approval.

Transitional Rules

  • Final transitional rules have been approved by the Council which are yet to be released in the public domain.
  • In case of goods taxable at the rate of 18 percent and above, ad-hoc credit in respect of goods for which document evidencing duty is not available, has been raised to 60 percent of the output CGST payable from the current 40 percent.
  • Furthermore, full ITC of excise duty paid can be availed on high-value items above INR 25,000 having clear identification by means of chassis number, product serial no., etc. through credit transfer document.

Finalisation of rates of certain commodities

  • Tax rates of more commodities were finalised, the key ones amongst which are as follows:
  • Commodity Rate
    Gold 3%
    Packaged food items sold under registered trademarks 5%
    Solar panels 5%
    Footwear having retail sale price not exceeding INR 500 5%
    Footwear having retail sale price exceeding INR 500 18%
    Biscuits 18%
  • To read the complete list of the rates of items finalised in this meeting, click here.

Format of returns

  • Revised formats of returns to be filed under GST finalised and released. These formats can be accessed here and the revised return rules can be accessed here.
  • The format for reporting mismatches, if any, on return filing has been released. It can be accessed here.
  • Some of the key changes which have been made in GSTR-1 are as follows:
    • The number of columns to be reported in case of taxable outward supplies reduced from 19 to 11.
    • There is no requirement in the return format (not even in summary table) to furnish details of Service Accounting Code (SAC) in case of services. However, prima facie, there is no waiver from reporting SAC in the invoice raised for supply.
    • In case of exports, if the details of shipping bill are not available, then GSTR-1 can be submitted without the said details. Furthermore, once the shipping bill is available, the same can be updated in subsequent periods GSTR-1 by furnishing details as an amendment in Table 9.
    • GSTIN of the recipient to be furnished in case of supplies to SEZ and deemed exports – this is an additional requirement vis-à-vis the earlier format.
    • Single column provided for furnishing the GST rate (vis-à-vis four separate columns as per earlier formats for mentioning the GST rate of SGST, CGST, IGST, Cess separately).
    • Relaxation in reporting requirement in respect of sale to unregistered person below INR 0.25 million.
    • Relaxation granted in the invoice level details and following requirements have been deleted in all tables of the return:
      • HSN/SAC details for supplies made/received
      • Whether the supply is of goods/service
      • Payment of GST under provisional assessment.
    • Place of supply details to be provided in all cases. Unlike earlier, these details were required only if the place of supply was different from the location of the recipient.
    • Details of HSN is optional for taxpayers having an annual turnover up to INR 15 million but they need to provide the information about the description of the goods supplied.
    • Following relaxations are provided in the details to be furnished for advance receipts.
      • Only a rate wise and state wise summary to be provided for advance received and advances adjusted.
      • The details of information relating to advances would be submitted only if the invoice has not been issued in the same tax period in which the advance was received.
      • Details of the recipient is not required to be reported.
      • Document details is not required to be reported.

SKP's comments

  • The Council has made substantial progress in resolving all disputes and walking the extra mile where relaxations were required in respect of transitional and return rules.
  • Industry is looking forward for the dilution of transition rules wherein heavy compliances have been prescribed to claim the opening credit.
  • Industry concerns remain on preparedness in light of the go-live date of 1 July 2017. The industry is of the view that frequent changes should not be introduces in the rules and reporting requirements which will prevent smooth IT implementation.
  • All eyes are now on the next meeting of the GST Council scheduled on 11 June 2017, wherein pending issues will be taken up and a silhouette of the Anti-Profiteering Authority will be clearer.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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