The draft E-Way Bill, however, will not be discussed at Srinagar. “It is unlikely to come up from July 1, although GST will be rolled out on that date. There are a lot of unresolved issues with respect to the threshold, RFID (radio frequency identification), intra-state and operational difficulties,” said a senior official.
The e-way legislation would not be scrapped, he said, but would be “an extremely watered-down version of what is there at the moment”.
Allaying another fear, over pricing of transition stock, the government is taking another look at transitional credit rules under Central GST. Under GST, the tax paid on stock transfers are fully available as input tax credit. However in the current system dealers do not get any input tax credit on excise duty paid. More, they would not be in a position to do so under the GST regime for existing stock without excise invoices.
The transitional credit rules provide for some respite by way of 40 per cent deemed credit on the Central GST portion. Business has been lobbying for raising this to 70 per cent. A senior Central Board of Excise and Customs (CBEC) official told Business Standard, on the side-lines of a conference on GST at business chamber Ficci, that the government was reviewing these. “We are looking at whether industry could be given higher deemed credit,” he said.
Sachin Menon, partner at consultancy KPMG, said a higher level of deemed credit would largely take care of business’ fear of revenue loss in the transitional phase for old stock. Sectors such as pharmaceuticals and consumer goods were most affected by the transitional credit rules. Many manufacturers, to assuage the worries of their dealers and retailers, have offered to bear the cost of any revenue loss on account of transition to the new indirect tax regime.
The two-day meeting at Srinagar, to be chaired by Finance Minister Arun Jaitley, with state finance counterparts present, will finalise nine rules — pertaining to composition, valuation, transition and input tax credit. The revised rules related to invoices, payment, refunds, registration and returns will be discussed. The five draft rules on accounts and refunds, advance ruling, appeals and revision, assessment and audit and the e-way Bill will not.
The Council will also discuss fitment of items under different rate slabs. It will deliberate on the report prepared by the rate and fitment committee.
GST will broadly have a four-slab structure of five, 12, 18 and 28 per cent. There will be zero-rated goods, as well as exempt items, beside an additional cess on ‘demerit goods’ like tobacco, cigarettes, luxury cars and aerated drinks.
Certain banks and financial institutions might also escape the complex prerequisite of separate registration in each state, with a leeway or scope for a special provision provided under the law. “We have provided an enabling provision under the draft GST law, to provide certain companies with centralised registration. We will consider providing this benefit in a few cases, such as banks,” said an official. The intent, he said, was to make compliance simpler for service providers.
The special provision says the central or a state government may, on the recommendation of the Council, by notification, specify the category which may be exempted from registering under the Act. The draft law also mentions that there could be procedures with regard to special filing of returns.