At its meeting on March 14, the GST Council is likely to rationalise tax rates on five industries, including cell phones, footwear and textiles, and delay enforcement of the current return filing and e-invoicing scheme. The Finance Minister, Nirmala Sitharaman will chair the GST Council meeting; she will also be addressing operational issues related to the GST portal.
Furthermore, ways to increase revenue collection also will be discussed as the Center has made it clear to the states that it doesn’t have money in compensation funds to pay the States for revenue loss due to the introduction of the goods and services tax (GST). The new lottery scheme under GST also is likely to be discussed in the upcoming GST Council meeting. The scheme is expected to commence from April 1, 2020.
As on today, mobile phones incur 12% duty, while GST charges are 18% on some of its inputs. In June last year, in terms of footwear, the Council had lowered the GST rate to 5% on products worth up to Rs 1,000, while those above this value face 18% tax. Nonetheless, inputs utilised by the sector attract a GST rate which ranges between 5% and 18%.
At the moment the textile industry has a differential GST rate of 5%, 12% and 18%. This leads to difficulties in getting exporters to issue and demand refunds. Currently, the GST limit on chemical fertilisers is 5%, while inputs are taxed at 12%.
Also, the compulsory e-invoice generation for Business-to-Business (B2B) transactions for companies with a turnover of more than Rs 100 crore might get delayed by three months until July 1. The GST Council will also agree on lottery deals under GST from April 1, 2020, by conducting lucky draws every month for invoices concerning all business-to-customer (B2C) transactions.
GST, introduced on July 1, 2017, has subsumed more than a dozen indirect taxes, including excise and service tax. Nonetheless, revenues under the current indirect tax system have not been picked up according to estimates, mainly due to evasion.
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Bhavana is a Senior Content Writer handling the GST vertical. She is committed, professional, and has a flair for writing. When away from work, she enjoys watching movies and playing with her son. One thing she can’t resist is SHOPPING! Her favourite quote is: “Luck is what happens when preparation meets opportunity”.