WHAT GST COUNCIL SHOULD DO ?

[Dr. Sanjiv Agarwal]

GST Council is meeting on Saturday, 22^nd December, 2018, perhaps for the last time in 2018 and for the first time after recent elections in few states. With the dates for filing GST Annual returns already postponed to March 2019, this meeting is likely to focus on GST rate cuts to bring further rationalisation in rate structure in India. This meeting may also address the woes of several trade concerns regarding taxability of certain goods and services, which are widely consumed across India.

In view of the fact that India goes to general elections for Parliament in less than six months from now (May, 2019) and the recent state election results, there is going to be a Christmas and new year gifts hamper from the GST Council offered to the citizens of country- from rate cut to dead line extensions to  simplification of procedures. (indeed ‘acche din’ to come, at last).

While certain macro level issues ought to be addressed by this high powered Council, i.e.,

• Rationalization of tax rates
• Inclusion of petroleum products
• Rationalization of taxes for alcoholic beverages
• Taxation of real estate
• Inclusion of electricity in GST
• Revamp of GSTN organization and functioning etc, 

There are certain areas of concern, particularly for small assessees and MSME sector.

Some of these are enumerated hereunder:

• Ease of registration process as well as surrender of registration
• Number of returns may be reduced
• Payment of tax be allowed on cash basis or on quarterly basis
• TDS / TCS may be made non-applicable
• All types of payment of tax under RCM to be with held
• ‘Aggregate turnover’ threshold may be increased for both services and goods
• Composition scheme to be expanded
• Rate of interest on delayed payment be reduced for MSMEs.
• Exemption from audit of accounts under GST, if already audited otherwise
• Repetitive billing to be allowed on consolidated basis
• No tax on advance money received
• Export procedures to be simplified further
• Time bound processing of refunds pending verification
• Special facilitation centres for assistance in filing / payment etc
• No fee on seeking advance ruling
• Immunity from penalties against procedural irregularities for atleast two years (till 2020)
• Scope of e-way bills to be reduced or simplified
• Input tax credit be allowed on all inputs / input services i.e., restrictions to be rationalized
• Incentivize tax compliant MSMEs.
• Clarity on IGST for goods purchased from one state but moved to other states
• No GST on inter-company transactions
• Threshold for GST audit be increased to ₹ 10 crore from ₹ 2 crore at present in initial three years.