Skip to main content

GST Overhaul on Cards to Make it Less Taxing

GST Overhaul on Cards to Make it Less Taxing
Changes may be with regard to input credit, place of supply and valuation provisions
The goods and services tax could be in for a revamp that's more comprehensive than the tweaks that have been made thus far to iron out kinks to make compliance less on erous. The GST Council has set up a new advisory group that includes industry representatives to look into such changes. Experts said these may apply to input credit apart from place of supply and valuation provisions.
The group will give its report to the law committee of the council by November 30. This will be reviewed by the committee and forwarded to the council for speedy action. “A group has been set up to give feedback about the issues faced by industry with regard to laws, rules and procedures,“ said a government official. This is in addition to changes proposed to the composition scheme to bring relief to small businesses and traders that could be taken up by the GST Council at its upcoming meeting on November 10 in Guwahati
The council could also reduce the rate of tax on some goods from 28% to 18% at this meeting. Traders and small businesses have complained about provisions in GST, which was rolled out on July 1, replacing multiple state and central taxes and cesses. They have sought the simplification of various rules in multiple representations to the government.Among the key points that may be addressed in a revamp are rules that deal with input tax credit, how to arrive at the value of goods and services for taxation purposes, invoices and determining from where a service is provided.
The latest panel will have former revenue service officer Gautam Ray as co-convener and include representatives of small businesses and retail. The group will specifically look at the central, state and integrated GST laws and problems faced by stakeholders due to their provisions.“Till now, the changes have been carried out by way of notifications and instructions,“ said Pratik Jain, indirect tax leader, PwC. “There is a need to do a comprehensive review of changes required in the legislation as well, based on issues that have already been highlighted by industry.“
PM Modi had indicated on Saturday that the government could take up more measures to ease problems faced by small businesses.The GST Council had at its last meeting raised the turnover threshold for the composition scheme to Rs 1crore from Rs 75 lakh. It also set up a group of ministers under Assam finance minister Himanta Biswa Sarma to look at other issues related to taxation under the composition scheme and GST for restaurants. The council is expected to lower the flat tax rate for traders availing of the composition scheme to 0.5% from 1% if they include both taxable and tax-exempt goods in their turnover.
The Economic Times, New Delhi, 06th November 2017

Comments

Popular posts from this blog

Shrinking footprints of foreign banks in India

Shrinking footprints of foreign banks in India Foreign banks are increasingly shrinking their presence in India and are also becoming more conservative than private and public sector counterparts. While many of them have sold some of their businesses in India as part of their global strategy, some are trying to keep their core expertise intact. Others are branching out to newer areas to continue business momentum.For example, HSBC and Barclays Bank in India have got out of the retail business, whereas corporate-focused Standard Chartered Bank is now trying to increase its focus on retail “Building a retail franchise is a huge exercise and takes a long time. You cannot afford to lose it,” said Shashank Joshi, Bank of Tokyo-Mitsubishi UFJ’s India head.According to the Reserve Bank of India (RBI) data, foreign banks’ combined loan book shrunk nearly 10 per cent from Rs 3.78 trillion in fiscal 2015-16 to Rs 3.42 trillion last financial year. The banking industry, which includes foreign banks…

New money laundering norms stump jewellery sector

New money laundering norms stump jewellery sector Dealers with turnover of Rs 2 crore and above covered; industry says threshold too low The central government has notified the money laundering rules for the gems and jewellery sector with immediate effect. Now, any entity deals in precious metals, precious stones, or other high-value goods and has a turnover of Rs 2 crore or more in a financial year will be covered under the Prevention of Money Laundering Act, 2002 (PMLA, 2002). The limit of Rs 2 crore would be calculated on the basis of the previous year’s turnover, said the notification. The directorate general of goods and service tax intelligence has been appointed under the Act. Sources said the government’s move to apply the PMLA to the jewellery sector was a fallout of income-tax raids on jewellers soon after demonetisation last November, when it was found that they sold gold and jewellery at a huge premium and accepted old currency notes as payment. The notification, issued on Augus…

Confusion over branded food GST

Confusion over branded food GST The GST Council's statement over the weekend on applying tax on branded food items has left most of the trade confused.

Even though the Council has not changed the rates on food -0 per cent on unbranded stuff and 5 per cent on brands -many small traders who didn't levy GST earlier said they could come under the 5 per cent slab after the clarification.

While they predicted some increase in consumer prices, large players said they can absorb GST in many ways and keep prices steady.

"Trade is confused and hence on behalf of our chamber, we have asked our members to go ahead and charge 5 per cent GST," said Sushil Sureka, general secretary of the Ahilya Chamber of Commerce and Industry in Indore.

The statement clarifying the application of GST came after some businesses were found deregistering their brands and selling under corporate brand name without paying tax, after the Council exempted unbranded food from the new all-encompassing indirec…