Union Finance Minister Piyush Goyal chaired the 28th GST Council meeting held on 21 July 2018 in New Delhi. The meeting discussed a plethora of issues such as simplification of return filing procedure, recommending amendments, rationalization of GST rates, etc. Some of the critical decisions taken have been summarized below:
Simplification of return filing procedure
The GST Council (the Council) in its previous meeting held on 4 May 2018 had given in-principle approval to introduce a simplified return filing procedure. Now, the Council has approved the format and business process of the simplified return filing procedure. The format of the returns has not been released in the public domain. However, the Council vide a press release has revealed the salient features of the same:
- Return based on 'Upload - Lock -
Pay.' The return system would be as follows:
- New return to contain two main tables - One for reporting outward supplies and one for availing Input Tax Credit (ITC).
- ITC would be based on invoice uploaded by the supplier.
- Invoices can be uploaded continuously by the seller and can be continuously viewed and locked by the buyer.
- Optional facility of filing quarterly returns in forms 'Sahaj' (only B2C supply) and 'Sugam' (B2C + B2B supply) for small taxpayers having turnover below INR 50 million.
- The Council is yet to notify a date for implementation of this simplified return filing procedure.
Recommendation of proposed amendments
The Council on 9 July 2018 had released a list of 46 proposed amendments to the GST Law for stakeholder comments. Now, the Council has recommended 17 out of these 46 proposed amendments to the GST law. Key recommended amendments are:
- ITC in respect of motor vehicles and certain obligatory employee benefits to be liberalized.
- On the filing of an application for cancellation of registration, the taxpayer to be immediately relieved from undertaking compliances.
- Pre-deposit payable for the filing of appeal before the Appellate Authority and the Appellate Tribunal to be capped at INR 250 million and INR 500 million respectively.
- Liability to pay interest on the reversal of ITC due to non-payment of consideration to the supplier within 180 days to be removed.
- The requirement of linking debit/credit notes to invoices to be removed.
- Job work sector - place of supply in case of job work of any treatment or process done on goods (e.g., gold, diamonds) temporarily imported into India and then exported without putting them into any other use in India, to be outside India.
- Supply of services to qualify as exports even if payment is received in INR, where permitted by the Reserve Bank of India (viz. exports to Nepal and Bhutan).
The amendments would come into effect once they have been enacted by the Parliament and the State Legislatures.
Rationalization of GST rates
The Council with effect from 27 July 2018 has rationalized GST rates and related matters in respect of certain sectors. The key decisions in this regard have been encapsulated below:
Sector | The decision by the Council |
Agriculture and food | Exemption to following services:
|
Banking and IT |
|
Hospitality |
|
Transportation |
|
Consumer durables | GST rates reduced from 28% to 18%
|
Textile | Fabric sector to be allowed a refund of accumulated ITC on account of inverted duty structure. |
Miscellaneous | GST rates reduced from 28% to 18%
|
SKP's CommentsThe Council has taken major decisions in view of the representations received from various sectors of the industry. The simplified return filing procedure along with the rationalization of rates is expected to boost GST revenue and increase compliance among businesses. The next GST Council is scheduled to be held on 4 August 2018. The meeting will primarily focus on the issues facing the Micro, Small & Medium Enterprise (MSME) sector. The meeting will also deliberate on promoting digital payments. |
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