GST Council gives relaxation of 2 months for filing of GST returns
[The official implementation of GST will take place on the midnight of June 30th in an official ceremony to be held on the same day,” FM Arun Jaitley said.]
India’s tryst with its most comprehensive indirect tax reform, the goods and services tax (GST), will begin on July 1. The GST Council, the apex decision body for the new tax, has stuck to the scheduled rollout.
GST seeks to bundle state and central levies into one and create a seamless national market throughout the country. But the norms for filing returns have been relaxed until September to ensure that the transition doesn’t hurt small traders and others who may not be ready for the new regime.
The council also approved the creation of an anti-profiteering authority that will exist for two years while clearing some other crucial elements of the proposed tax framework at its meeting in the capital on Sunday.
It set the rate on lotteries at 12% of face value for those run by state governments and at 28% for those authorised by state governments but run by private entities. It revised the levy for restaurants inside five-star hotels to the standard rate of 18% from 28%.
Besides, only hotels with room tariffs above Rs 7,500 will now face a 28% levy against Rs 5,000 earlier. For room tariffs between Rs 2,500 and Rs 7,500, the rate will be 18%.
“We do not have the luxury of time to defer GST... The GST Council decided to roll out (GST) from the July 1,” union finance minister Arun Jaitley, also council chairman, told reporters on Sunday. “The official launch will be on June 30 midnight.
IT Preparedness Discussed
The relaxation in filing of returns until September will mean no late fees or penalties.
“This is intended to provide a sense of comfort to taxpayers and give them elbow room to attune themselves with the requirement of the changed system,” an official statement said.
Traders will have time until July 20 to pay tax based on a simple return while invoice details can be filed from July 15 onwards. The registration window will open from June 25 for new registrants as also those migrating from the existing tax system to GST.
Most states have already passed state GST laws with West Bengal opting for an ordinance. Revenue secretary Hashmukh Adhia said states have put in place systems and are in readiness for the impending rollout.
The council also took stock of the GST Network’s IT preparedness. The “state of readiness of IT network was discussed at length,” Jaitley said, adding that 81.1% of existing taxpayers have enrolled on GSTN.
Of the total 8.091million, 6.56 million have registered, he said, adding that some may be out of the tax net as the exemption threshold is pegged at Rs 20 lakh, instead of Rs 5 lakh or Rs 10 lakh in some states. Industry was divided on the rollout, with some seeking a deferral of the start date, although Assocham reversed its earlier stand to back a July 1rollout. Jaitley said industry will now have 42 days before it has to make any filing.
“Industry is ready for the landmark tax reform of GST, which is expected to bring significant gains for economic growth, employment and exports,” said Chandrajit Banerjee, director general, Confederation of Indian Industry. “CII is undertaking more than 100 workshops across the country to enable enterprises to comply with the new regulations.”
Anti-profiteering
The council approved the operational framework and rules for the proposed anti-profiteering authority that will ensure that consumers get the benefit of any cut in taxes under GST.
A standing committee of nine members, consisting of state, central and GST Council officials, will examine complaints that will be passed on to the Director General Safeguards for investigation.
The anti-profiteering authority, which will be set up soon, will take the final call on whether a company has engaged in profiteering. If it has, the amount will have to be refunded to consumers and if that’s not possible, given to the consumer welfare fund.
Nuts and bolts
The council approved changes in the threshold for the composition scheme in the Northeast to Rs 50 lakh instead of Rs 75 lakh, raised at the last meeting and applicable for all other states, citing the small trader base there. It also expanded the negative list for the composition scheme to include ice-cream, pan masala and tobacco.
The council also gave the go-ahead to five sets of rules dealing with advance rulings, appeals and revisions, assessments, anti-profiteering and funds settlement.
Another set of rules dealing with the contentious E-way bill was discussed at length but could not be finalised because of divergent opinions among states.
The E-way draft bill mandates that any transfer of goods over Rs 50,000 will need an E-way permit for transfer within and outside a state. Jaitley said until a final decision is taken, existing provisions would prevail.
The council has set a 5% integrated GST on shipping vessels with input tax credit.
“The relaxation for filing transaction-wise details returns in July, August till September with interim aggregate return will provide relief to the industry and is very welcome,” said Harishanker Subramaniam, national leader, indirect tax Services, EY India. “Key rules like anti-profiteering have been approved with a body set up in July. It’s critical to understand these rules. Statement that anti-profiteering will be more a deterrent needs to be followed in practice.”
MS Mani, senior director, Deloitte Haskins & Sells LLP, said, “The announcement of an extended time line for filing the returns... should not make businesses complacent as the additional time available is very limited... Several issues relating to real-life problems raised by business to the sectoral committees are yet to be decided upon and may not now see the light of the day before GST rollout.”
The Confederation of All India Traders (CAIT) welcomed the relaxation in filing returns under GST for July and August.
“However, allowing continuation of existing system of different states for checking inter-state transactions may bring distortions in first phase of GST itself and as such it would have been much better if provision of E-way bill and HSN code is suspended for at least six months,” the lobby group said. CAIT reiterated that the transition period should be extended to March 31, 2018, and no penal action taken against traders for procedural lapses.
“Much needs to be done at the level of empowerment of small businesses with technology as about 60% of the traders still have not adopted computerisation,” it said. “CAIT has also urged that since GST Council is scheduled to meet on 30th June,2017, a re-look at 28% tax slab is much needed because various items which are neither luxury and nor demerit have been placed under this slab.”
India’s tryst with its most comprehensive indirect tax reform, the goods and services tax (GST), will begin on July 1. The GST Council, the apex decision body for the new tax, has stuck to the scheduled rollout.
GST seeks to bundle state and central levies into one and create a seamless national market throughout the country. But the norms for filing returns have been relaxed until September to ensure that the transition doesn’t hurt small traders and others who may not be ready for the new regime.
The council also approved the creation of an anti-profiteering authority that will exist for two years while clearing some other crucial elements of the proposed tax framework at its meeting in the capital on Sunday.
It set the rate on lotteries at 12% of face value for those run by state governments and at 28% for those authorised by state governments but run by private entities. It revised the levy for restaurants inside five-star hotels to the standard rate of 18% from 28%.
Besides, only hotels with room tariffs above Rs 7,500 will now face a 28% levy against Rs 5,000 earlier. For room tariffs between Rs 2,500 and Rs 7,500, the rate will be 18%.
“We do not have the luxury of time to defer GST... The GST Council decided to roll out (GST) from the July 1,” union finance minister Arun Jaitley, also council chairman, told reporters on Sunday. “The official launch will be on June 30 midnight.
IT Preparedness Discussed
The relaxation in filing of returns until September will mean no late fees or penalties.
“This is intended to provide a sense of comfort to taxpayers and give them elbow room to attune themselves with the requirement of the changed system,” an official statement said.
Traders will have time until July 20 to pay tax based on a simple return while invoice details can be filed from July 15 onwards. The registration window will open from June 25 for new registrants as also those migrating from the existing tax system to GST.
Most states have already passed state GST laws with West Bengal opting for an ordinance. Revenue secretary Hashmukh Adhia said states have put in place systems and are in readiness for the impending rollout.
The council also took stock of the GST Network’s IT preparedness. The “state of readiness of IT network was discussed at length,” Jaitley said, adding that 81.1% of existing taxpayers have enrolled on GSTN.
Of the total 8.091million, 6.56 million have registered, he said, adding that some may be out of the tax net as the exemption threshold is pegged at Rs 20 lakh, instead of Rs 5 lakh or Rs 10 lakh in some states. Industry was divided on the rollout, with some seeking a deferral of the start date, although Assocham reversed its earlier stand to back a July 1rollout. Jaitley said industry will now have 42 days before it has to make any filing.
“Industry is ready for the landmark tax reform of GST, which is expected to bring significant gains for economic growth, employment and exports,” said Chandrajit Banerjee, director general, Confederation of Indian Industry. “CII is undertaking more than 100 workshops across the country to enable enterprises to comply with the new regulations.”
Anti-profiteering
The council approved the operational framework and rules for the proposed anti-profiteering authority that will ensure that consumers get the benefit of any cut in taxes under GST.
A standing committee of nine members, consisting of state, central and GST Council officials, will examine complaints that will be passed on to the Director General Safeguards for investigation.
The anti-profiteering authority, which will be set up soon, will take the final call on whether a company has engaged in profiteering. If it has, the amount will have to be refunded to consumers and if that’s not possible, given to the consumer welfare fund.
Nuts and bolts
The council approved changes in the threshold for the composition scheme in the Northeast to Rs 50 lakh instead of Rs 75 lakh, raised at the last meeting and applicable for all other states, citing the small trader base there. It also expanded the negative list for the composition scheme to include ice-cream, pan masala and tobacco.
The council also gave the go-ahead to five sets of rules dealing with advance rulings, appeals and revisions, assessments, anti-profiteering and funds settlement.
Another set of rules dealing with the contentious E-way bill was discussed at length but could not be finalised because of divergent opinions among states.
The E-way draft bill mandates that any transfer of goods over Rs 50,000 will need an E-way permit for transfer within and outside a state. Jaitley said until a final decision is taken, existing provisions would prevail.
The council has set a 5% integrated GST on shipping vessels with input tax credit.
“The relaxation for filing transaction-wise details returns in July, August till September with interim aggregate return will provide relief to the industry and is very welcome,” said Harishanker Subramaniam, national leader, indirect tax Services, EY India. “Key rules like anti-profiteering have been approved with a body set up in July. It’s critical to understand these rules. Statement that anti-profiteering will be more a deterrent needs to be followed in practice.”
MS Mani, senior director, Deloitte Haskins & Sells LLP, said, “The announcement of an extended time line for filing the returns... should not make businesses complacent as the additional time available is very limited... Several issues relating to real-life problems raised by business to the sectoral committees are yet to be decided upon and may not now see the light of the day before GST rollout.”
The Confederation of All India Traders (CAIT) welcomed the relaxation in filing returns under GST for July and August.
“However, allowing continuation of existing system of different states for checking inter-state transactions may bring distortions in first phase of GST itself and as such it would have been much better if provision of E-way bill and HSN code is suspended for at least six months,” the lobby group said. CAIT reiterated that the transition period should be extended to March 31, 2018, and no penal action taken against traders for procedural lapses.
“Much needs to be done at the level of empowerment of small businesses with technology as about 60% of the traders still have not adopted computerisation,” it said. “CAIT has also urged that since GST Council is scheduled to meet on 30th June,2017, a re-look at 28% tax slab is much needed because various items which are neither luxury and nor demerit have been placed under this slab.”
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