With the objective of ensuring smooth rollout of GST on July 1 and taking into account the concerns expressed by the trade and industry regarding filing of the returns in GST regime, Government has decided that for the first two months of GST implementation, the tax would be payable based on a simple return (Form GSTR-3B) containing summary of outward and inward supplies which will be submitted before 20th of the succeeding month.
However, the invoice-wise details in regular GSTR – 1 would have to be filed for the month of July and August, 2017 .
No late fees and penalty would be levied for the interim period. This is intended to provide a sense of comfort to the taxpayers and give them an elbow room to attune themselves with the requirements of the changed system. This not only underlines the government’s commitment towards ensuring that all the stakeholders are on board but also provides an opportunity to the taxpayers to be ready for this historic reform.
The GST Return-1 (GSTR-1), which reflects sale invoice details, can now be filed by September 5, instead of the earlier deadline of August 10. For August, the new deadline for GSTR-1 is September 20 instead of September 10.
“To obviate any lack of preparedness, a slight relaxation of time for two months — July-August — has been given. From September, strict adherence to time will go on,” Finance Minister Arun Jaitley said after the seventeenth GST Council meeting.
In a major concession, the Council also decided to provide relief to hotels by raising the threshold tariff for the 28 per cent tax rate to Rs 7,500 from the Rs 5,000 proposed earlier. “After a lot of discussion (it was decided) that 28 per cent limit in hotels will start from Rs 7,500, which means that between Rs 2,500 and Rs 7500, the rate will be 18 per cent. It will be 28 per cent beyond Rs 7,500. Similarly, tax GST on restaurants in these hotels will be at par with other air conditioned restaurants which is 18 per cent,” Jaitley told reporters.
The Council also fixed the GST rate for state-run lottery at 12 per cent. State-authorised lotteries will be taxed at 28 per cent of face value, Jaitley said. Jaitley said the July 1 timeline for the rollout of GST, saying the indirect tax regime would be launched on the midnight of June 30. “A number of companies and trade have been raising the issue of lack of preparedness. We don’t have the luxury of time to defer GST implementation,” he said.
The Council cleared six draft rules including those against profiteering. “I hope we are not compelled to use it (anti-profiteering rule),” Jaitley said. The Council has decided to put a two-year sunset clause for the anti-profiteering provision under GST, Revenue Secretary Hasmukh Adhia said. A three-tier structure will ensure compliance with the anti-profiteering clause. The GST implementation committee, consisting of four state government officials, four central government officials, and one GST Council member, will function as the standing committee to look into anti-profiteering complaints. The complaints will then be referred to DG (Safeguards), which will function as the investigative authority. The final decision will be taken by a five-member committee with a retired Secretary as its chairman.
The rules for e-way bill, however, are still under consideration of the GST Council, and are likely to be taken up in subsequent meetings, implying that it won’t be in place from July 1. “It was decided that further deliberation will continue and till then, an alternate rule will operate to authorise the existing system to continue,” Jaitley said.
The Council also decided the threshold limit for the composition scheme for special category states. Jaitley said that barring Uttarakhand, which has opted for a Rs 75 lakh threshold for the composition scheme, and Jammu & Kashmir, the Rs 50 lakh threshold will continue for all other special category states.
In the previous GST Council meeting, the threshold for the composition scheme was raised to Rs 75 lakh from the earlier decided level of Rs 50 lakh for other states, and the decision on special category states had been kept pending.