GST Council Meeting on 22nd December discussion
GST council meeting has just concluded and it was an utter disappointment looking at that most of the policy decisions have been deferred. Looks like the focus was only on rationalization of rates of tax. Most of the items presently charged at 28% has been reduced to 18%. The frozen vegetables has also been reduced from 5% to zero. So not much apart from rate of tax has been done.
What has not been reduced on rate of tax is cement, automobiles part, Air Conditioner and Dishwasher. The auto parts also continue to be charged at 28%. The Council analysed that 22% of the tax revenue is collected from items charged at 28%. Sin Goods and luxury items also continue into 28% bracket.
1. Religious visits to Haj/pilgrimage through chartered plane has been reduced to rate of tax charged with normal flights.
2. But there were no sound related to refund for railway sector or implementation of new amended provisions. The council did not focus on any of such policy matters and had deferred the same for next GST Council Meeting.
3. We expected that there shall be some announcement related to the new GST Return formats. There council decided that a trial run for these new return formats would start from 1st April 2019.
4. Also government provided a major relief to the taxpayers by allowing ITC to taxpayers for FY 2017-18 till 31st March 2019.
5. Also it has been decided that the interest shall be charged only on the net cash payable liability on the taxpayer and not on full tax liability. This means that the interest shall be charged on the tax payable after utilisation of Input Tax Credit. A suitable amendment u/s 50 has been proposed.
6. Further in a major decision Council has in principally approved the Composition scheme for the small scale service providers. It was felt that the service sector especially small scale ones are under huge burden of GST. The council unanimously approved the scheme for small scale service providers. The rates and threshold limit for this scheme shall be decided in forthcoming meetings.
7. Taxation on residential property in real estate sector to be reviewed by the fitment committee. Decision regarding 12% tax on under construction property needs to be taken.
8. The Council is also thinking on lines to increase the basic threshold limit of Rs. 20 lacs. Also there had been changes proposed in case of natural calamity. Also where there this conflicting views of two or more AAR, the central authority will take the view and same shall be binding nationally.
9. The services provided by banks to saving accounts holder and holder of jan dhan account shall be exempted.
10. Setoff amongst different head/sub head of tax shall be allowed. A common ledger will be prepared where the amount shall be utilised inter head.
11. Also the annual return and GST Audit extended till 30th June 2019. Also major change expected in these return. Taxpayer can also make changes in the data he had filed in his monthly returns.
12. The council also decided that refund applications shall be purely online and there shall be no manual process. Based upon test run the future course of action shall be decided.
13. No Late fees to be charged till 31st March 2019
GST COUNCIL MEETING UPDATE
1. The new return filing system shall be introduced on a trial basis from 01.04.2019 and on mandatory basis from 01.07.2019.
2. The due date for furnishing the annual returns in FORM GSTR-9, FORM GSTR-9A and reconciliation statement in FORM GSTR-9C for the Financial Year 2017 – 2018 shall be further extended till 30.06.2019.
3. The due date for furnishing FORM GSTR-8 by e-commerce operators for the months of October, November and December, 2018 shall be extended till 31.01.2019.
4. The due date for submitting FORM GST ITC-04 for the period July 2017 to December 2018 shall be extended till 31.03.2019.
5. ITC in relation to invoices issued by the supplier during FY 2017-18 may be availed by the recipient till the due date for furnishing of FORM GSTR-3B for the month of March, 2019, subject to specified conditions.
6. Late fee shall be completely waived for all taxpayers in case FORM GSTR-1, FORM GSTR-3B &FORM GSTR-4 for the months / quarters July, 2017 to September, 2018, are furnished after 22.12.2018 but on or before 31.03.2019.
7. Changes made by CGST (Amendment) Act, 2018, IGST (Amendment) Act, 2018, UTGST (Amendment) Act, 2018 and GST (Compensation to States) Amendment Act, 2018 and the corresponding changes in SGST Acts would be notified w.e.f. 01.02.2019.