The 27th GST Council meeting commenced on 4th May 2018. In the meeting, decisions were taken towards promoting digital transactions & GST rates on some goods. However, the main agenda of the meeting was the simplification of GST return filing process. Here are the key takeaways from the meeting.
1) Simplification of return filing process
The GST Council gave approval to a new simplified return filing process. The key points related to this new method are as follows:
- Now all the taxpayers are required to file a single monthly return. The only exceptions are the composition dealers (who file a single return every quarter) and dealers filling NIL return.
- A method will be developed which enables the buyer to see invoices uploaded by the supplier (in any time basis during the month) in real time basis.
- The taxpayers will be able to get their tax liability and input tax credit automatically calculated based on invoices uploaded by B2B dealers. This will be facilitated through a user-friendly IT interface.
- If the seller did not pay tax, the buyer would not lose the credit of ITC automatically. Default in payment will be recovered from the seller, and the authorities will have an option to reverse credit in exceptional situations, but automatic reversal will be disabled.
- A robust, online and automated process will be created to reduce human interaction on the GST portal. Reversal of input tax credit and recovery of tax will be done by issuing notices through this automated process.
- To prevent the misuse of input tax credit, suppliers will be stopped from uploading invoices if the default in the payment of tax exceeds a certain threshold.
- This new simplified system of filing returns will be implemented in 3 stages. In the first stage, dealers will continue filling GSTR 3B and GSTR 1 for six months. In the next stage, the new return will have facility for invoice-wise data upload and facility for claiming ITC on self-declaration Dealers will be fed with the information on the gap between the credit available to them (add per the invoices uploaded by the seller in GSTR 1) and provisional credit claimed. This stage will also last for six months. In the last stage, the facility to claim provisional credit will be withdrawn, and the taxpayers will be able to claim the credit only based on invoices uploaded by the seller.
2) Promotion of digital transactions
GST council recommended to reduce the rate of tax (where the GST rate is 3% or more) applicable on B2C supplies where the payment is made through cheque or digital mode for a ceiling of Rs 100 per transaction.
3) Cess on sugar above 5% GST rate
Keeping in view the record production of sugar in the current season, the council discussed the possibility of levying a cess over and above the 5% GST and reduction of GST rate on ethanol. The council recommended setting up a GoM from state governments to look into this matter and make recommendations within two weeks.
4) Complete control over GSTN
In the meeting, the government also decided to bring GSTN completely under its control by buying 51% stake from the private entities.
5) GST on property transfer
A proposal was made to levy GST on the transfer of property.
6) Changes in ITC provisions
The council proposed amendment of ITC provisions so that businesses can claim credit on any business related expense.
7) Update on RCM
The council proposed preponement of reverse charge mechanism. In the initial phase, it will be applicable only to a particular category of taxpayers.
If you need any assistance in filing your monthly GST returns, our team of in-house experts can help you with it. Contact us and get all the help you need to comply with the GST laws.