Political News

GST Council meet: Rollout to rule changes, decisions explained in 12 points

Dated 18th June, 2017

GST Council meet: Rollout to rule changes, decisions explained in 12 pointsThe government would allow companies to file late returns for the first two months after the implementation of the Goods and Service Tax (GST) regime on July 1, Finance Minister Arun Jaitley said on Sunday after a meeting of the GST Council. This would help companies adapt to the new online filing system.

GST, arguably the biggest tax reform in 70-year history of independent India, will require companies to file three online returns each month. Some industry bodies had earlier urged that the rollout of GST, scheduled for July 1, be delayed to allow companies more time to get ready.

Here are the key decisions taken by the GST Council on Sunday explained in 12 points:

1. Implementation: The GST Council categorically decided to implement the indirect tax regime from July 1. There would be a special GST launch at Delhi’s Vigyan Bhawan on the intervening night of June 30 and July 1.

Even as it is now certain that there is going to be no delay in the rollout, it is believed that necessary relaxation in rules would be given as and when required. Since the return filing dates have been relaxed, there will be no late payment fees.

2. Relaxation in filing of returns: Corporations would need to file a single-page summary return in GSTR-3B form on a self-declaration basis for the first two months – July and August – by the 20th day of the following month.

This implies, for the month of July, a summary return will need to be filed by August 20, after paying appropriate taxes; for August it will need to be filed by September 20.

3. Filing of invoices: GSTR-1 with invoice level details for the month of July will need to be filed by September 5. For the month of August, the deadline will be September 20. GSTR-2 and GSTR-3 for these two months will be filed thereafter.

This implies tallying for GSTR-2 and GSTR-3 for the first two months – July and August – will take place only after September 5 and 20, respectively.

4. Relaxation in tax rate for hotels: For hotels with tariff between Rs 5,000 and Rs 7,500, a reduced GST rate of 18 per cent will apply. The restaurants at these hotels would also be taxed at 18 per cent.

The GST rate for this category of hotels has been reduced to 18 per cent from the 28 per cent proposed earlier.

5. Tax rate on lotteries: State-run lotteries are going to be taxed under the GST regime at 12 per cent, while state-authorised private lotteries would fall in the 18 per cent tax slab.

6. Negative list of Composition Scheme: Only three products – ice cream, paan masala and tobacco – have been added in the negative list of the Composition scheme.

This implies that only the composition scheme will not be available for ice creams, paan masala and tobacco.

7. No clear call on GST E-way bill: The GST electronic waybill would be deferred. It would be implemented later, after rules for it are finalised. Till such a time, an alternative e-way bill would be introduced to allow continuance of the current system.

This implies the current system of way bill would continue until the GST E-way bill has been approved and implemented.

8. Input tax credit on ships: An integrated GST rate of 5 per cent, with full input tax credit, would apply on ships.

9. Anti-profiteering rules: The GST Council on Sunday also approved the anti-profiteering rule for GST.

10. New registration: For the upcoming GST regime, new registrations would begin from June 25.

11. Next meeting: The GST Council will meet again on June 30 to take stock and decide before the implementation of GST.

12. Textiles: The GST Council has made it clear that there would be no further relief to the country’s textiles sector before the rollout of GST.

Source: www.business-standard.com