Key GST meeting underway: 5 things to expect
The GST Council, headed by Finance Minister Arun Jaitley on Thursday is meeting for another set of deliberations on the new tax regime.
The GST Council, in its meeting ahead of Budget 2018, will also consider a reduction in GST rates for goods and services in view of the representations received from various interest groups.
This would be the 25th meeting of the Council. Chaired by Union finance minister and comprising his state counterparts, the Council will give its nod for GST law amendments which could be taken up for consideration and passage in the Budget session starting 29 January, sources said.
Inside visuals of 25th GST Council meeting underway in Delhi. pic.twitter.com/7ZXlLJhupZ— ANI (@ANI) January 18, 2018
The law review committee which was set up by the government has suggested centralised registration for large service providers with an annual turnover of over Rs 500 crore and operating in 10 or more states.
The committee has made as many as 16 recommendations based on the suggestions of the advisory panel comprising trade and industry.
Among other things, the Council will review the preparedness of GST Network (GSTN) in handling the return filing process as well as for implementing the e-way bill system with effect from 1 February.
Here are some of the key reforms that are expected:
Another round of rate cut
The GST Council may cut tax rates on as a many as 70 items and offer simpler GST returns filing. Of these 70 items, 40 is likely to be various services. The GST Council is also likely to cut rates on agriculture-related products, media reports said.
Real estate under GST
According to ANI, discussion on the inclusion of real estate under the GST is one of the key agendas of the Council. Stamp duty on a property before registration might come under the ambit of the GST. While the GST Council is likely to discuss the proposal, it may take more time to bring real estate under the new indirect tax regime.
Simplification of returns filing
Besides, the Council is also likely to discuss single-stage return filing process, instead of the current three-stage mechanism. The move is likely to help services providers who are operating from different cities and states. Some reports also suggest that the three GST Returns form - GSTR-1, GSTR-2, GSTR-3 - may be consolidated as one.
A case for natural gas and jet fuel
The GST Council may also discuss bringing natural gas and jet fuel under the GST, while the chances of bringing, petrol, diesel and electricity are thin. Both aviation ministry and petroleum and oil ministry have made a strong case for bringing ATF and natural gas under the GST.
The Council meeting comes against the backdrop of lower GST collections and higher than the Budgeted fiscal deficit. GST collections slipped for the second straight month to Rs 80,808 crore in November, down from over Rs 83,000 crore in the previous month. The collections fell after the Council cut rates on as many as 178 items.
Easing compliance burden
Following the representations by the industry, the Council had in November 2017 set up a committee under GSTN Chairman Ajay Bhushan Pandey to suggest steps for easing compliance burden on traders.
Deloitte India Senior Director M S Mani said there has been a reduction of 10% in the number returns filed compared to the initial months.
"This is a worrying trend. While some reduction in compliance in recent months can be attributed to the technology challenges faced by taxpayers and some amount of uncertainty due to the multiple extensions in the return filing timelines, arresting the trend of declining returns needs significant attention," Mani said.
OneIndia News (with agency inputs)