The 27th GST Council Meeting was held on 4th May, 2018. The event was successful and it assured better economic growth for India. Below, the details regarding the GST rates, exemption rates, simplifications etc. are elaborated.
Simplification of GST Return
- GSTR-1 and GTR 3B has been on-going for the next 6 months after the GST meeting.
- It was planned that after 6 months,a new single-return plan will be implemented. Hence, instead of 36 returns annually, there will be only 12 returns.
- To make the preparation easier and for the ease of doing business, the information which is necessary to give in the return will be minimized.
- In the 6 months transitional phase based on self-made calculations, the return preparers can claim the provisional credit and post the new return on live.
- The invoices uploaded by the seller is shown to the buyer by the GSTN. In this way, a buyer can look over the gap between the credit that is actually permitted to him and the one he claimed.
- Invoices are to be considered valid documents irrespective of when the seller uploaded it at any time of the month and it has to be available for the buyer to put input tax credit on it.
- If it found that the seller has not paid the tax amount to the government after the 6 months of transition period, then in that case, GSTN owns all the rights to recover those taxes from the buyer. In these cases, the buyer cannot apply for the automatic reversal of credit.
- After the transition period of 6 months, provisional credit cannot be claimed.
- Composition dealers and the nil-return preparers will have to give GST return every 3 months.
Rates and Measures Taken on Digital Payments
The implementation of sugar cess has been delayed in the new GST council meeting update. This is done because the government believes that there has to be a better way to maximize the revenue which will benefit the farmers. Reduction for the duties regarding ethanol has been proposed. The responsibility of solving these two issues has been imposed on a group of minister in order to make recommendations within 2 weeks after the GST meeting.
The plans and measures taken for the digital payments may need a lot more time. A council of 5 members has been assigned to work on the aspect of digital payments within the time frame till next council meeting. The offering is to impose 2% concession GST rates on B2C supplies more than 3%. Rs 100 each transaction has been proposed to be used for the cap of the incentive.
GST is De-Privatized
This has been probably the most interesting highlight of the 27th GST council meeting. After this event, it was decided that the GSTN will continue as a government-owned company instead of a private company. The government would possess the remaining 51% equity which was previously held by the Non-Government Institutions. It is implied that the Central Government will hold 50% of the stake holding in the future and the State Government balances the 50% of stake holding. Such holdings will be on pro-rata basis which is held by the government based on the ratio of GST. It was planned that GST would be recruiting more people. Hence, there were room for more employment according to the new GST council meeting update
The Key Expectations from the 27th GST Council Meeting:
The expectations made from this particular event included the ITC claiming process, simplified return filing, and E-Way Billing regulations (EWB) mechanism of reverse charge and so on. Below will be the list of the expectations will detailed information and also notes on whether or not those expectations were met.
Simplification of Return Filing and Claiming process of ITC:
- In order to reduce the quantity of returns, helping in invoice matching and to have specified details all at a same place, a comprehensive single return has been proposed with the details of inwards and outward supplies. The main area of focus will be on the move, supporting the brainwork of Digital India and to make everything tech-savvy.
- In order to eradicate the need for waiting for acceptance from the recipient, confirmations or the difficult tasks of uploading purchase/sale details to get the credit, a simplified process of ITC claiming has become a need of an hour.
E-Way Billing Regulations:
- A process where the E-way bills are checked only one time during which the transit has been proposed
- In order to generate the EWBs in cases of unsupported forms, alternate lines for uploading necessary information and details are to be introduced
- Each state must follow only one format to generate the E-way bill as one whole nation. The formats cannot change from state to state. This is done to avoid having a different form in each state in addition to the common notified ones and to stop create confusion. This is done to simplify the whole process.
Mechanism of Reverse Charge
- The date for the application of reverse charge mechanism has been advanced (before 30th June). This has been possibly done initially for the particular kind of taxpayers, for example, the dealers under the composition scheme.
Other Mentionable Area
- A cess has been imposed on sugar to assist the farmers
- Inclusion of the transport of property or real estate into the GST scheme
- In order to begin any company to receive finance on any expenses (for example, transportation of employee etc.) related to business, amendment of the provision of ITC in the GST has to be done.
- There is exemption on the payments done by the employees when they receive any service from their employers (for example, canteen services)
- Expectations related to clarity is done based on the different adjudications on anti-profiteering rules under GST update.
- Digital transactions through the provision of discounts, cash backs, credits etc. are encouraged
These were the main highlights of the 27th GST council meeting done with more hopes for a better economic structure of the country, as well as providing necessary information and services to all business at the time of need.