GST Council meeting updates – Major decisions

  • Simplified Model Delayed:- The present system of filing Form GSTR 3B i.e. summary returns and Form GSTR 1 is extended for three months till June 2018, which essentially means that the new simplified model of GST returns will take some more time to be finalized. However, at the meeting, the GST Council discussed two models for returns filing – one presented by Mr. Nandan Nilekani and the other presented by tax administrators, but no decision could be reached, as the GST Council struggled with the trade-off between having a simpler return form versus the possibility of tax evasion. As per the GST Council recommendations, a group of ministers, under the leadership of Bihar Deputy Chief Minister Sushil Modi, has been tasked to chalk out a single page form, in discussion with tax experts, which is both simple and evasion proof. However, a major consideration will be the recommendation made by Mr. Nilekani, wherein he suggested that, instead of supplying invoices to be uploaded, a module can be formed where supplying invoice details can be posted, and based on the invoice data fed by the supplier, the system by itself will be able to generate the return. However more clarity on this is awaited in subsequent meetings.
  • Tax Exemptions for Exporters Extended:- The available tax exemptions on imported goods have been extended for a further period of six months beyond March 31st, 2018 i.e. till September 2018, as per the GST Council notifications. Now, exporters availing various export promotion schemes can continue to avail such tax exemptions on their imports up to September 30th, 2018. The GST Council is hopeful, that by that time, the e-wallet scheme will also be in place, which will enable the exporters to carry forward the tax benefits in the future periods as well.
  • E-Way Bill Roll-out from April 1st:- The electronic way bill or e-way bill for movement of goods between states will be implemented from April 1st, 2018. However, for intra-state movement, the e-way bill would be rolled out in a phased manner starting April 15th, and will cover all the states by June 1st. For this purpose, the GST Council 26th meeting saw a roll-out model being proposed, wherein the country will be divided into 4 zones and each week, one zone will get added to e-way bill, so that a full roll-out may be attempted within May itself, as per the latest e-way bill news.
  • Reverse Charge Mechanism Deferred:- The liability to pay tax on reverse charge has been deferred till June 30th, 2018. Meanwhile, the GST Council has directed a group of ministers to look into the modalities of its implementations to ensure that no inconvenience is caused to trade and industry, because of the deferment of RCM.
  • Deduction of TDS/TCS Deferred:- The provisions for deduction of tax at source (TDS) and collection of tax at source (TCS) under the CGST Act shall remain suspended till June 30th, 2018, as per the GST Council meeting updates. In the meantime, the GST Council will look into the modalities of linking the State and Central Government accounting systems with the GSTN, so that seamless credit is available to the registered traders whose tax is deducted or collected at source, as and when it is implemented.
  • GST Portal Grievances:- Work will continue with regards to redressing the grievances caused to taxpayers, due to the IT glitches at the GST portal, as per the GST Council meeting updates. The GST implementation committee has been tasked with the work of expediting such complaints and take measures to bring in the necessary corrections.
  • Exempt Goods:- As per the discussions in previous GST Council meetings, it was expected that the GST Council 26th meeting will take the first step towards including the list of exempt goods under GST. While the agenda surely was to take a call on two such goods – extra neutral alcohol i.e. alcohol used in making alcoholic beverages and aviation turbine fuel – no final decision could be taken on the same. Thus the nation will have to wait, till further discussions on the same are started.

To summarize the 26th GST Council meeting updates, it can be said that the government’s key area of focus is simplifying the return filing process, even if it means deferring other aspects of GST for the time being – such as TDS, TCS, RCM, exempted goods etc. While it is encouraging to note that the GST Council has decided to dedicate more time and effort in order to finalize, test and announce the simplified returns filing process, an implementation which is sooner than later, will be beneficial in order to prevent tax evasions.