HIGHLIGHTS OF GST COUNCIL MEETING HELD

GST Council today in its 27 meeting approved principles for filing of new return design based on the recommendations of the Group of Ministers on IT simplification. The key elements of the new return design are as follows –

Incentive to promote Digital Transactions:

• Keeping in view the need to move towards a less cash economy, the Council has discussed in detail the proposal of a concession of 2% in GST rate [where the GST rate is 3% or more, 1% each from applicable CGST and SGST rates] on B2C supplies, for which payment is made through cheque or digital mode, subject to a ceiling of Rs. 100 per transaction, so as to incentivise promotion of digital payment.

Simplified returns filing system

• The Current Return filing System of  till the new software for the return filing system would come into force within six months

One monthly Return

• All taxpayers excluding a few exceptions like composition dealer shall file one monthly return. Return filing dates shall be staggered based on the turnover of the registered person to manage load on the IT system. Composition dealers and dealers having nil transaction shall have facility to file quarterly return.

GST Liability & Credit Calculation

• The B2B dealers will have to fill invoice-wise details of the outward supply made by them, based on which the system will automatically calculate his tax liability. The input tax credit will be calculated automatically by the system based on invoices uploaded by his sellers. Taxpayer shall be also given user friendly IT interface and offline IT tool to upload the invoices.
• The facility of provisional input tax credit will be withdrawn only after the new system is completely implemented, which is expected to take around one year. After it comes fully into force, the input credit will be auto-generated for the buyers based on invoices uploaded by the sellers.

Due process for recovery and reversal:

• Recovery of tax or reversal of input tax credit shall be through a due process of issuing notice and order. The process would be online and automated to reduce the human interface.

Imposition of Sugar Cess over and above 5% GST and reduction in GST rate on ethanol:

• Sugar Cess implementation has been postponed. The government believes that there should be a better way to increase revenue for the benefit of the farmers.
• Duties on Ethanol – Reduction in rate suggested.

GSTN Ownership

• Currently GSTN is owned by the Government (Central and State) along with five private financial institutions — HDFC, HDFC Bank, ICICI Bank, NSE Strategic Investment and LIC Housing Finance. GSTN is incorporated as a Section 8 Company.Since, the data handled by GSTN is very sensitive, the ownership of GSTN will be fully transferred to the Central Government.

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Recommendations of 43rd GST Council meeting.

1. The filing of annual return in FORM GSTR-9 / 9A to be optional for taxpayers having aggregate annual turnover upto Rs 2 Crore;
2. The reconciliation statement in FORM GSTR-9C will be required to be filed by taxpayers with annual aggregate turnover above Rs 5 Crore.
3. Taxpayers would be able to self-certify the reconciliation statement (GSTR 9C), instead of getting it certified by Chartered Accountants / Cost accountants.

It will increase the accountability and responsibility of the management as now he will not be able to make an excuse that mistake happens because he had not to get proper guidance. Anyway, Self Certification gives as much trouble as Self Medication.

Proposed Amendment for Annual Return and GSTR 9C and its impact