The GST Council may consider reducing the tax slab to 5% from the existing 12% on the labour component in government project works when it meets for the second time today. The GST Council, headed by Finance Minister Arun Jaitley, will discuss various issues related to the Goods and Services Tax via video conference call in the national capital. On the back of disruptions caused due to technical glitches, confusion over tax slabs, and higher transitional credit refund, the GST Council is likely to put these issues on priority:
The transitional credit refund claim by taxpayers in the first month of July was staggering Rs 65,000 crore, of which the government estimated that only Rs 12,000 crore as valid. Rest of the amount is under scrutiny, which has made exporters nervous. Exporters fear that if the GST refund of about Rs 65,000 crore does not start flowing immediately, it would get stuck and, further deteriorate their liquidity situation. The industry representatives, including exporters, who met Finance Minister Arun Jaitley last week raised this issue. The council is likely to discuss the process of refund in the meeting today and take immediate steps to speed it up.
Tax and compliance relief to small taxpayers
The GST council is also going to discuss and announce several measures to reduce the burden on small taxpayers who are struggling to adjust to the GST regime. The council may also relax return filing timeline for small and medium enterprises (SMEs). Taxpayers under the GST regime with income worth up to Rs 1.5 crore may be exempt from filing returns every month, and instead be required to file it once in a quarter. “The GST Council meeting on Friday will take important decisions on integrated GST refund and ease of doing business for small taxpayers,” GST Council Group of Ministers (GoM) head Sushil Modi said.
The council is going to discuss technical glitches being faced by taxpayers on the GST Network. “Most of the IT-related glitches have been resolved and traders are finding the network easier to file their returns online. Structural changes in the GST regime will also be deliberated in the upcoming council meeting with the member states from across the country and will be announced by Union Finance Minister Arun Jaitley,” IANS quoted Sushil Modi as saying. The revamped GSTN, which can handle 80,000 returns in an hour, will be enhanced to process 130,000 returns per hour by this month-end, he added.
Tax cut on 60 items
The GST Council in its first meeting lowered tax on as many as 40 daily use items of the 100 items identified. The council may take up the remaining 60 items for lowering the tax today. On the other hand, the council had levied an additional 2%-7% cess on mid-sized and luxury cars on September 9 during the first meet in Hyderabad. The council had also lowered the GST rates for a number of daily-use products ranging from idli/dosa batter to kitchen gas lighter.
Meanwhile, the majority of SMEs traders across nation are anxiously looking at Today’s GST Council meet. It is expected that in accordance with demand of Delhi based CAIT, an apex body of local traders such as E-way bill implementation may be deferred, reverse charge mechanism may be suspended quarterly filing of returns, FORM3B instead of GSTR returns till 31st March, 2018, lowering tax rates on different items majorly from 28% tax slab, amendments in Composition scheme etc.
This story was originally published in Financial Express on October 6th, 2017
If you have an interesting article / experience / case study to share, please get in touch with us at [email protected]