The GST Council meeting is held every 3 months giving decisions regarding changes in GST and addressing other pressing issues. The meeting was started by Ms. Nirmala Sitharaman discussing the ups and downs GST has faced in the past financial years.
She started by welcoming the head of Infosys Mr. Nandan Nilekani who addressed
1.The issue of system improvement and the problems faced by the Taxpayers for the last one year in GST.
Mr. Nandan Nilekani started with a presentation on behalf of Infosys to throw some light on the above issue. Infosys gave some sustainable and good solutions. He also briefed the council on the things that triggered such issues and their ways to tackle them to improve the system. The ministers also put up some questions regarding increased capacities and the urgent need of skilled people.
2. The proposal of better- enhanced capacity, responsive staff, better system, etc. which had to be achieved by January 2021, is being preponed to July, 2020 by the Council members.
The council ministers have also demanded Infosys to have better coordination with Tech Mahindra which takes over the saving complaints, responding complaints, etc. Instead of acting a bridge between them, the Council asked the Infosys to work together with Tech Mahindra to speedily and meaningfully respond to Tax payer’s problems. Mr. Nandan Niketan graciously accepted this proposal.
3. The form GSTR-1 and GSTR-3 will continue till September 2020 and the new GST Return filing system has been postponed till 10th October 2020.
In addition, Ms. Nirmala Sitharaman asked the Infosys head to be present in the next 3 consecutive GST Council Meetings to discuss his improvements and brief them about the goals they have achieved from then on. Ms. Nirmala Sitharaman assured that the majority of the issues and demands raised will be solved soon.
The meeting was followed by the Fitment Committee’s (Tax officials of Central and State government) presentation on weight reduction, inverted tax i.e. when the tax on inputs is more than the tax on the final product, inverted tax problems, correction of inversion, etc.
They looked into the items that have sharp inverted duty problems like Textiles, Telephones, Fertilizers, and footwear. They gave a suggestion regarding the corrections in the inverted tax of these items but this idea of correction wasn’t as appealing to the Ministers as the economy was not so stable to bear with it.
Post lunch there was a slight change in their views and they arrived at a decision to correct the invert tax rate of some items from the list.
4. One such item was Mobile Phone and its parts which attracted 12% GST at present was increased to 18%.
The increase in the price of the mobile phones to this regard will be looking at by respective mobile companies as said by the Finance Secretary- Mr. Ajay Bhushan Pandey in the Press Conference. He also cleared the fact that earlier the mobile companies were also facing difficulties and capital blockage.
Another issue had been raised by Tamil Nadu’s Prime Minister regarding the difference in rate between hand-made matches and machine-made matches.
5. Earlier the hand-made matches and machine-made matches attracted 5% and 18% respectively that was rationalized to one common rate i.e. 12%.
6. The GST for Aircraft was slashed to 5% from 8
The above decision was taken with respect to MRO services (Maintenance Repair and Overall Services) which will now attract people to set up MRO. There is a relief for Domestic MROs who will also get protection under section 3(7) of the Customs Tariff Act on most imported goods.
7. All the above decisions will come into effect from April 1, 2020.
8. Interest will be charged on the Net Cash Liability instead of Gross Liability for the delay in payment of GST.
9. The date of Application of Cancellation Registration has been extended to 30th June 2020 which was till 14 March 2020. This extension is a one-time measure to facilitate the people who want to conduct their business.
10. Relaxation is given to MSME for Reconciliation statement (a document having a company’s record) in the form 9-C, having an annual turnover below 5 crore, only for the financial year 2018-2019.
11. The due date for filing the annual return of the financial year 2018-19 has been extended till 30th June 2020.
12. There will be no late fees charged for the delay in filing the annual return and reconciliation statement for 2017-18 and 2018-19 having an aggregate turnover of less than 2 crores.
13. An additional facility has been provided named ‘Know Your Supplier’. This facility has been given to every taxpayer to know about the supplier with whom they are working. The facility includes the details of the supplier like PAN, GSTIN, Address, GST Return Filing Status, etc.
A discussion was also carried out on the topic of the Compensation Revenue Position. There have to be several measures taken regarding the fallout in actual tax collected than the actual amount given to the state, the idea of borrowing from the market, who takes the guarantee of it, etc. Ms. Nirmala Sitharaman said that
14. 78,000 crore tax was collected this year and 1, 20,000 crores was given to the states.
She also said that a detailed discussion will be held again on these matters by taking more legal opinions in the upcoming meetings. The matter of revenue augmentation was also not discussed in detail.