The 25th GST Council meeting was held on January 18, 2018. The main focus of the meeting was the revision of GST rates on various goods and services and simplification of the returns filing process. Here are the key takeaways from the meeting:
GST rates were lowered on 29 goods and 53 services. The new reduced rates will be effective from January 25, 2018.
The late fee payable by any registered person for failure to furnish FORM GSTR-1 (supply details), FORM GSTR-5 (Non-resident taxable person) or FORM GSTR-5A (OIDAR) will be reduced to fifty rupees per day. It will be twenty rupees per day for NIL filers. Those who fail to furnish FORM GSTR-6 (Input Service Distributor) will be liable to pay fifty rupees per day.
The report and recommendations submitted by the Committee on Handicrafts have also accepted by the GST Council. As many as 40 items will be categorised as handicraft goods by the fitment committee. This has been done with the aim of boosting export of such goods. The government also expects that this will make those goods competitive in the international market.
Taxable persons who have obtained voluntary registration will now be permitted to apply for cancellation of registration even before the expiry of one year from the effective date of registration.
For migrated taxpayers, the last date for filing FORM GST REG-29 for cancellation of registration has been extended by further three months till March 31, 2018.
In the meeting, the return filing process was also reviewed. The monthly filing of form GSTR-3B along with a supplier’s invoice will continue for now. In the upcoming meeting, the government will discuss and finalise an alternate method which will be formalised by two ministerial groups.
In the previous GST council meeting, it was decided that the e-way bill system will be implemented from February 1, 2018. Fifteen states will start intra-state the e-way bill from the same month. The e-way bill is expected to act as an anti-tax evasive measure for which the trial was initiated earlier this month. The facility for generation, modification and cancellation of e-way bills is being provided on trial basis on the portal ewaybill.nic.in. Once fully operational, the e-way bill system will start functioning on the portal ewaybillgst.gov.in
The GST Council also discussed the composition scheme, which offers a flat GST rate to dealers at the expense of not getting an input tax credit refund. The council noticed that in the first three months of the rollout of the new indirect tax regime, only Rs 307 crore was collected from near 17 lakh dealers. Keeping this fact in mind, the government will make some “minor changes” to the CGST, IGST and SGST Acts through an amendment. The amendment will be circulated among the Council before the next meeting for approval.
A large amount of credit, approximately Rs 35,000 crore from the IGST collections was lying idle with the government. The council has decided to provisionally distribute it between the centre and states. The government hopes that this step will boost the indirect tax position of both the central and state governments.
The next meeting of the GST Council will be held through video-conferencing. The panel will meet after 10 days.