GST return filing rules relaxed for Jul-Aug, July 1 rollout

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The Goods and Services Tax (GST) Council at its 17th meeting on Sunday decided to increase the room tariff threshold, above which the luxury rate of 28% will apply, to ₹7,500 from the ₹5,000 decided earlier.

The Council also decided to defer the dates of filing the detailed return for July and August.

It also approved the rules for advance ruling, appeals and revisions, assessment, anti-profiteering, and fund settlements. On e-waybills, it decided that the existing system would continue until consensus was reached on the rules.

The Council decided that State-run lotteries will fall in the 12% tax bracket, while all others will be taxed at 28%.

“Some States, especially Goa and Rajasthan, made representations for the relook of the rates on hotels,” Union Finance Minister Arun Jaitley told the media. “It has been decided that the 28% limit be raised to ₹7,500. That means that hotel rates between ₹2,500-7,500 will be at 18%.”

“The current dates are that the GSTR 1 form, with invoice-wise details, has to be filed by the 10th of the month following the assessing month,” Revenue Secretary Hasmukh Adhia said. “But, to give some relief to businesses getting ready, we have decided to introduce a new form GSTR 3B that will need to be filed by August 20 for July and September 20 for August.”

“The invoice-wise details needed in GSTR 1 for July can be filed by September 5, and for August by September 20,” Mr. Adhia added.

“The announcement of an extended timeline for filing the returns for July and August is a welcome development. However this should not make businesses complacent as the additional time available is very limited,” M.S. Mani, Senior Director at Deloitte Haskins & Sells said. Mr. Jaitley said that while some flexibility has been given for returns for July and August, the returns for September will follow the original dates. “If people are not ready by then, then that’s to their own detriment,” he said.

E-waybills delayed

“There were two opinions prevalent in the Council regarding e-waybills,” Mr. Jaitley said. “The discussion will continue on this until a consensus is reached. Till this happens, an alternative rule will operate which will authorise the existing system to continue.”

“The decision to leave waybills to the States for now would increase the complications for business that were expecting to operate in a simpler environment for inter-State trade,” Mr. Mani added.

“Hopefully waybills will be used only for selected goods and on highly restricted basis and will not become a mandatory transit document.”

However, the other view is that the system of waybills is highly complex and that the additional time is welcome.

“Discussion on the e-waybill has been a contentious issue for States, as some of them already have a robust mechanism in place and shifting back to handbills would cause them revenue loss,” Ansh Bhargava, Senior Consultant at Taxmann.com, one of the 34 GST Suvidha Providers said. “Deferring the decision to implement the e-waybill system by the GST Council is a welcome step, as it would help the GST Network to understand the nuances involved and come up with a solution that facilitates various industries.”

“We don’t have the luxury of time to defer the rollout of GST,” Mr. Jaitley said. “The official launch of GST will take place on the midnight of June 30.”

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