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35th GST Council Meeting
35th GST Council Meeting was held on 21 June
2019 at New Delhi, after a long gap of more than three months.
This was the first council meeting chaired by
the re-elected government and India’s second woman Union Finance Minister, Mrs.
Nirmala Sitharaman. This GST Council meeting has been called at a time when the
countdown to upcoming Union Budget 2019 is less than a month away. A lot of
expectations piled up over months concerning various indirect tax issues will
be addressed in this meeting.
Highlights of 35th GST Council Meeting
The 35th GST Council meeting concluded with
consensus on the following matters
1. GST annual return due date extended till 31
August 2019 for FY 2017-18
The due date for filing GSTR-9, GSTR-9A, and
GSTR-9C for the FY 2017-18 has been extended for two months, till 31 August
2019. Official notification will be publish anytime soon.
2. Aadhar enabled GST Registration introduced:
In order to speed up the current process of
GST registration and reduce the paperwork involved, GST Council has given a
go-ahead to a new system for verification of taxpayers registering themselves
under GST. Aadhar number shall be linked to the GSTIN while generation.
3. NAA tenure extended for two years
Tenure of National Anti-profiteering Authority
(NAA) was end by 30 November 2019. GST Council has further extended this tenure
by two years, to enable it to take up all the pending cases. Hence, the
authority can take up new cases in future due to cut off rate issues,
indicating that the GST Council has plans for further rationalization of GST
rates.
4. 10% penalty to apply for any delay in
depositing made an illegal profit amount
GST Council has approved a levy of 10% penalty
for delay in depositing an illegal profit amount by more than 30 days. This is
a fair measure that would encourage timely compliance by the taxpayer.
5. E-invoicing to start from January 2020
The new system for raising all the tax
invoices on the GST portal has received in-principle approval for
implementation from 1 January 2020. This applies to only B2B invoicing. By this
system, no separate e-way bill will be required in case of e-invoice. Returns
to be framed from these e-invoices. A phased implementation is being worked
out.
Earlier, the government had fixed Rs 50 crore as the limit for the
applicability of e-invoicing.
6. E-ticketing made mandatory for multiplexes
Among other major decisions, the GST Council
approved the electronic ticketing system, for multiplexes, having
multi-screens. This will help curb cases of tax evasion and the use of black
tickets that have been prevalent.
7. Rate cut decision on electric vehicles,
chargers & leasing thereof deferred; Committee to submit its report
The decision to cut GST rates for electric
vehicles and electric chargers have been postponed to the next Council meeting.
The matter has been referred to the Fitment Committee for checking the
feasibility of the rate cut. At present, the GST rates for electric vehicles
and electric chargers are 12% and 28% respectively.
Likewise, the valuation rules for goods and
services pertaining to solar power generating systems and wind turbines will be
placed before the next Fitment Committee. The suggestions made by this
Committee will be placed before the next GST Council meeting.
8. Rate cut for lottery put on hold; Matter to
be referred before an Attorney General
The previous council meet had not tabled the
rate cut matter for lotteries. The 35th GST Council meeting discussed the
matter at length and also brought to light two pending cases on this matter
before the high court and Supreme Court respectively. Although the courts had
referred the matter back to GST Council, the Council has decided to consult the
Attorney General of India.
9. GSTAT to be GST Appellate Tribunal.
The GST council also definitively stated the
Goods and Service Tax Appellate Tribunal will be the appellate authority and
will adjudicate on appeals arising from central and state tax authorities’
in-house dispute resolution system. The states will decide the number of GSTAT
required by them as a result of which there can be two tribunals in a single
state.
10. Other Due date extensions
|
Form |
New due date |
|
ITC-04 for July 2017-
June 2019 |
31 August 2019 |
|
CMP-02 for opting into the
composition scheme for service providers under Notification 2/2019-CT rate |
31 July 2019 |
11. For non-filing of GST returns, E-way bills
to be blocked
The law stated that where the GST returns in
GSTR-3B/ GSTR-4 is not filed for two consecutive tax periods, e-way bill
generation for such taxpayers would be disabled. This will be brought into
effect from 21 August 2019, instead of the earlier notified date of 21st June
2019.
Below were the key things expected to be
tabled at the upcoming council meeting:-
1. Review status of GSTR-9 filings
While GSTR-9 appears to be a summary
return, it requires a lot of information to be presented. Some of it has never
been asked in the GSTR-1 and GSTR-3B returns. Preparation of GSTR-9 requires
significant effort and therefore its filing must not be delayed. Taxpayers
still have confusion about this form and the government must make efforts to
make sure filings improve and taxpayers complete this very important tax
compliance that belongs to the FY 2017-18.
2. New Simplified GST returns – clarity on the
input tax credit
GST Council may include in its agenda, various
issues that require clarity – one of them being the mechanism of claiming ITC
in the proposed scheme of GST 2.0. ITC in GST 2.0 will be available
automatically via the return forms ANX -1 and ANX-2. However, clarity on ITC
claims in the intervening period i.e. when both GSTR-1 and GSTR-3B are being
filed and ANX-1 is being tested needs to be clarified in detail.
3. Deciding the applicability of e-invoicing
E-invoicing has gained a lot of traction in
the past month among businesses. Some say government plans to introduce the
compulsory e-invoicing requirement for businesses with an annual turnover of
over Rs 50 crores. This can help curb tax evasion. This system will also help
to negate any gaps between GSTR-1 and GSTR-3B and ensures that the input tax
credit does not get misused.
There are still gaps in understanding the
impact of introducing e-invoicing. One of them being the availability of much
more simplified returns for those subject to e-invoicing on GSTN since the
sales details are already uploaded at the time of invoicing. It is to be seen
how this move can impact those taxpayers who are interacting with such persons
subject to e-invoicing.
4. To bring into effect geotagging through
RFID
E-way bills can be checked through
the RFID tagging mechanism. However, this system is yet to come into
effect-to-date. This can help keep a check on unaccounted consignments moving
across India.
5. Rationalisation of tax rates
There will be a discussion for revising the
GST rate on electric vehicles from 12% to 5% to boost sales. Also, the rate for
electric charger may be reduced from the current 28% to 18% is on the agenda.
GST rate for Hybrid vehicles also will undergo a cut.
In its previous council meetings, GST Council
has set up committees for addressing and studying the issues of taxation
of lotteries and other items. A decision needs to be taken to rationalise
the structure of taxing the state-run lotteries and private players.
Taxation of solar projects is another key area
to look forward to in the agenda. To add to the list is the automobile sector
which is keen to enjoy a GST rate cut from the maximum 28%. Currently, the
sector is seeing a slow movement in sales and a rate cut will help it in
recovery.
GST Council may consider levying GST on a few
items that have for a long time been left with no GST rates.
ENA: One such highly anticipated item is ENA,
also known as extra-neutral alcohol used as input in the manufacturing of
whisky, gin, country liquor, and so on.
Natural Gas & Petroleum products: Upcoming
GST Council meeting may hold the first round of discussions on the pros and
cons of fixing GST rates on petroleum products and natural gas.
6. Proposal to extend the tenure of NAA &
approve new setups for appellate tribunals
The two-year tenure of National
Anti-profiteering Authority (NAA) that ends on 30 November 2019 may be extended
by one more year till 30 November 2020. Nearly 60 plus cases remain pending
before the authority, the authority needs more time for passing the orders.
There are multiple proposals before the GST council for setting up more
appellate tribunals across India.
7. Miscellaneous
GST Council has a proposal before it to
introduce e-ticketing for cinemas.
Further, the GST Council will take a call on
establishing GST Tribunal in States.
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