The 37th GST Council meeting is all set to take place in Goa on the 20th of September, 2019. Various sectors have been pushing for a plethora of concerns to be reviewed from rate-cuts to GST returns, to the Council’s own agenda of boosting revenue collections and the prevention of frauds.
The sectors pushing for rate cuts at the moment are the auto-sector, FMCG sector especially biscuit-manufacturers, and cement. The automobile industry is experiencing its worst slump in two decades, and despite several measures being announced in the recent past to boost sales, manufacturers seem to be convinced that a rate-cut in GST could be the only possibility to combat the decreasing sales numbers.
Builders, on the other hand, cannot pass on the high 28% GST on cement due to the inverted duty structure and have to absorb costs themselves. Hence, they are looking for an overall slash in the GST rates on cement.
Rate-cuts, though being constantly pushed for by various sectors, seems unlikely in this Council meeting, due to the fall in GST revenue collections, which the government is rather hoping to boost at this point in time. However, the same could be up for review for a decision to be taken at a later date.
One of the other major issues we can see the Council focussing on is battling GST frauds, which seems to have become a common occurrence. Of late, the government has noticed revenue leakages to the extent of Rs.50,000 crore, which is a huge amount to ignore, considering the declining revenue collections.
The Council is expected to suggest measures that will involve the state governments, asking them to intervene to tighten the overall processes, in the hope of preventing tax evaders from finding any further loopholes in the system.
On the GST returns front, the situation right now is unfavourable with the annual return GSTR-9 to be filed for FY 17-18, getting extended yet again for the fourth time. The lengthy and complicated return form has resulted in backlash from large and small taxpayers alike, with CAs and businesses pressurizing the government to either simplify the return form or eliminate it altogether.
The fate of the GSTR-9 return now lies in the hands of the Council members and even a simplified return form now, at the zero hours, will be a much-awaited boon to taxpayers.
The new return system under GST, scheduled to be implemented from October 2019 onwards, seems to be in a state of limbo due to the uncertainties associated with the GSTR-9 return.
It may not be the wisest decision for the government to introduce something new at this time, and there could be a possibility of the new return system getting deferred to the next year. The same is also expected to be discussed in the upcoming meet.
Overall, there is a lot to look forward to this Council meeting, and taxpayers are hoping that the outcomes will not disappoint.
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Athena is a globe-trotter whose aim is to see 30 countries before she’s 30. When she’s not travelling, she’s busy planning her next trip. She’s a Chartered Accountant by profession with a keen focus on GST. She writes by day and reads by night.