26th GST Council Meet concluded on Saturday, the 10th March 2018 at Vigyan Bhawan, New Delhi
Key decisions made :
- GST Return Simplification: Current GST Return filing system to continue for next 3 months. Taxpayers can continue to file GSTR-1 and GSTR-3B as the GSTN is constantly improved to accommodate the new challenges.
- On the E-Way Bill front :
- Inter-state implementation of E-way bill to be implemented from 1st April 2018
- Intra-state implementation of E-Way Bill to take off from 15th April 2018 a phased manner. States to be divided into 4 lots to execute this phased rollout
- Reverse Charge Mechanism (in case of supplies made by unregistered persons to registered persons) delayed till 1st July 2018
- TDS & TCS applicability postponed until 30th June 2018 pending procedural
- Exporters presently availing various export promotion schemes can now continue to avail such exemptions on their imports up to 1st October 2018 by which time an e-Wallet scheme is expected to be in place with effect from 1st April 2018, to continue the benefits in future
- Council has advised the GSTN to expedite the export refund claims
- No GST rate changes announced
- A committee has been formed to look into the Grievance redressal mechanism with respect to user’s grievances surrounding the IT glitches on the GSTN
Although expectations were high around this council meeting, no major announcements were made with regards to Input tax credit (ITC) & Return simplification.
Following were the key areas that were expected to be addressed at this 26th GST Council Meet:
A. Simplification of return filing and Scheme of input credit claim
- To Focus on: Origin point for ITC claim whether at the time of Supplier’s Sales Invoices uploading or at the time of Return filing by the buyer will be most likely to be settled this meet
- Invoice upload by the Supplier & recipient likely to be regular ongoing process and Invoices accepted by the supplier to be accepted or rejected by the recipient and accordingly acceptances up to a certain date of the month shall be processed for ITC claims of the relevant month
- A system of Single monthly return & the Quarterly reconciliation of Invoices/documents uploaded is on the cards. The new Return filing may be implemented on trial basis before the full-fledged applicability. Also, two due dates in the month likely to be fixed for filing returns for large and small taxpayers to address the tech crashes
- Affected taxpayers: Those who are liable to file GSTR-1, GSTR-2 & GSTR-3
- Unaffected taxpayers may be taxpayers filing only GSTR-4, GSTR-5, GSTR-5A or GSTR-6
- The GSTR-3B filing facility which expires on March 31 likely to continue for few more months.
B. E-way bill review and implementation
- April 1st Roll out for Interstate applicability most likely
- Intra-States applicability – 4 to 5 states may first see implementation on a pilot basis
C. Composition scheme changes
- Enhancing threshold for Composition Scheme to Rs 3-5 crore from the current limit of Rs 1 crore
- RCM under section 9(4) to be made applicable to a composition dealer as well.
D. Rate changes
- Rationalisation of GST on agricultural implements and items used by farmers
- The government’s push towards clean energy may translate towards trimming rates on e-vehicles.
E. Other decisions expected:
- Levy of GST on extra neutral alcohol (ENA) likely to push up the prices of Consumable liquor, one of its end-product
- Centralized registration for service providers like banks, financial institutions and insurance firms
- To remove restrictions on the input tax credit (ITC), as recommended by the law review committee that had submitted its suggestions on how GST could be made more compliance-friendly and effective
- Amendment of the ITC provision in the GST to enable any business to take credit for any business-related expenses (employee transport etc.)
- Entry of natural gas and real estate in the indirect tax regime
- Streamline the Anti-Profiteering mechanism thereby giving more strength to the regulatory body- National Profiteering Authority (NAA).
