Some year-end cheer from GST Council

A Christmas gift from the Goods and Services Tax (GST) Council was a reduction in the rates on a number of items and simplifying of many procedures. In due course, the finance minister later said, the 12 and 18 per cent rates might be merged into a single one. And, that the next step would be to transfer cement to a lower slab.


The Council mostly rationalised rates in the 28 per cent tax bracket for many items and proposed many changes for those in the 18, 12 and 5 per cent brackets. GST on solar power generating plants and other renewable energy units got rationalised. In a great relief for taxpayers, the due dates for filing of annual returns, details relating to goods sent for job-work, tax collection at source by e-commerce operators and completion of migration for taxpayers with provisional identification were extended.


The big relaxation is the decision to allow input tax credit (ITC) against invoices issued by a supplier during 2017-18 till April 20, 2019, the due date for furnishing of form GSTR-3B for March, subject to specified conditions. Another big relief is approval to amend Section 50 of the Central GST Act, to provide that interest be charged only on the net liability i.e output tax liability, net of admissible ITC. Late fee is also being waived for all taxpayers in case of a delay in furnishing form GSTR-1/3B/4 for the months/quarters July 2017 to September 2018. Hopefully, those who have already furnished their returns with late fees will get a re-credit in their electronic cash ledger.


Laudable are proposals for a single authority to disburse the refund amounts sanctioned by either the central or state tax authorities, a centralised Appellate Authority for Advance Ruling (AAAR) to deal with cases of conflicting decisions by two or more State Appellate Advance Ruling authorities on the same issue, a trial run of the new GST return filing system from April 1, before making it mandatory from July 1, and a single cash ledger for each tax head.


Measures to improve compliance will include barring the generation of e-way bills by those who have not filed returns for consecutive tax periods. And, allowing additional payment, if any, through form GST DRC-03 only in cash, denying ITC through forms GSTR-9 or GSTR-9C. And, a decision to auto-populate all invoices pertaining to the previous financial year in form GSTR-9. Also, all returns in forms GSTR-1, GSTR-3B and GSTR-4 will have to be filed before doing so for forms GSTR-9, GSTR-9C or GSTR-9A.


Useful changes will be made in the formats/instructions in the annual returns and reconciliation statements, with suitable amendments of headings in the relevant forms. HSN codes may be declared only for those inward supplies whose value independently accounts for 10 per cent or more of the total value of inward supplies. Value of ‘non-GST supply’ shall also include the value of ‘no supply’.  Verification by a taxpayer who is uploading a reconciliation statement would be included in form GSTR-9C.


Filing of refund claims will be made easier, by allowing more types of refunds and related documents to be filed electronically. Taxation of houses and extension of the composition scheme to small service providers will be considered.


Overall, taxpayers have something to cheer this year-end.



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