GST Returns: No Consensus
The GST Council discussed two models for returns filing - one presented by Nandan Nilekani and another from the tax administrators, but no decision could be taken. The political executive is more comfortable with the Nilekani model as it is simpler, but the tax administration thinks it will lead to more tax evasion, Jammu and Kashmir Finance Minister Haseeb Drabu told BloombergQuint.
Relief For Exporters
Tax exemption for exporters has been extended by 6 months, said Jaitley.
The decision to extend the exemptions will send a "strong positive signal” to the exporting community, the finance ministry said in a press release.
Exporters presently availing various export promotion schemes can now continue to avail such exemptions on their imports up to October 1, by which time an e-wallet scheme is expected to be in place to continue the benefits in future.Finance Ministry Statement
The GST Council also reviewed the progress in grant of refunds to exports of both IGST and Input Tax Credit, the finance ministry added.
Council directed GSTN to expeditiously forward the balance refund claimsto the Customs/Central GST/State GST authorities, as the case may be, for theirimmediate sanction and disbursal.Finance Ministry Statement
Reverse Charge Mechanism
The reverse charge mechanism has been extended by three months, said Jaitley.
No Decision Yet
The finance minister said couple of issues couldn’t be taken up for want of time. They include:
- Inclusion of extra neutral alcohol
- Inclusion of aviation turbine fuel
The responsibility of grievance redressal has been given to the GST Implementation Committee, Jaitley added.
Intra-State E-Way Bills: Staggered Rollout
- From April 1, inter-state movement of goods will need generation of E-Way bills.
- States have been divided into four groups for the purpose of E-Way bills implementation. The mechanism will be rolled out in a staggered manner, with one new zone been added every week.
- Will try and complete the rollout of intra-state E-Way bills by April-end.
Jaitley Speaks Post GST Council Meeting
- Only procedural issues were discussed in the 26th GST Council meeting.
- Discussed in detail the two models for return filing system presented by the GoM.
- Council wanted to try and simplify the returns filing process.
- No concrete decision was taken today on the the GST returns filing system.
- Current system for returns filing will be extended for three more months.
- GoM will continue to interact with IT experts to try and find a way to simplify the system further.
Proposal To Tax Raw Material In Alcoholic Beverages
The GST Council is also likely to consider levying an 18 percent tax on 'extra neutral alcohol' - alcohol used in making alcoholic beverages, two senior officials told BloombergQuint requesting anonymity.
Currently, ENA, also known as ethyl alcohol is used in a different form for industrial purposes besides being used as as a raw material for production of whiskey, country liquor, and other alcoholic beverages. Denatured ethyl alcohol and ethyl alcohol used for industrial purposes is taxed at 18 percent, but not ethyl alcohol used in production of alcohol consumed by humans. This as the Constitutional amendment said GST would not apply on “on the supply of the alcoholic liquor for human consumption”.
Intra-State E-Way Bill Rollout Plan Expected
The Group of Ministers headed by Sushil Modi, in its meeting on Feb. 24, had decided to implement the e-way bill mechanism for inter-state movement of goods from April 1. It had also decided that generation of e-way bills for movement of goods within a state will be adopted in a phased manner, starting with 4-5 states initially.
Since the e-way bill system crashed on Feb. 1, the earlier rollout date decided by the GST Council for the mechanism, generation of such invoices had to be deferred. The decision to introduce e-way bills for inter-state transactions from April 1 met with skepticism from Kerala Finance Minister Thomas Isaac. Speaking to BloombergQuint on Feb.26, Isaac had said that he was not sure whether the IT systems were more prepared then than they were at the beginning of February, when the government first attempted to introduce e-way bills.
26th GST Council Meeting Underway
In its 26th meeting, the Goods and Services Tax Council is expected to discuss a slew of changes to the GST regime.
The Council, chaired by Finance Minister Arun Jaitley, is expected to take up e-way bills mechanism for inter-state movement of goods, discuss measures to simplify returns filing procedure and consider the introduction of an 18 percent on the raw material used in making alcoholic beverages.
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