Council cuts GST rate cuts on 29 items and 54 services under composition scheme

Off late, the Goods and Services Tax Council (GSTCouncil) cut tax rates on 29 products and 54 services. The same was announced at the 25th meeting of the council, wherein they agreed to make the process of filing tax returns simpler.
At the meeting chaired by FM Arun Jaitley, the federal indirect tax body cut GST rates on products, such as household cooking gas cylinders from private suppliers and precious stones and pre-owned vehicles.

Services that had a GST rate cut are like legal assistance provided to the government and its agencies, admission to theme parks and small housekeeping services provided by e-commerce firms, such as UrbanClap. These rate cuts will impact the revenue adjustment of Rs 1,100 to 1,200 crore.

This business call for simplifying the process of GST return filing comes in the middle of revenue loss worries expressed by states, primarily because of tax evasion. Easing the process can result in stopping this evasion.

A final decision on the same is yet to be made with respect to the revamping of the return filing process. The GST Council is thinking of doing away with forms such as GSTR 2, dealing with purchases, and GSTR 3, a comprehensive return. Instead of this, the already existing simpler summary return form GSTR 3B will continue, which will be supplemented with details from invoices to be uploaded by suppliers on the GST Network (GSTN). This will enable invoice matching and check tax evasion.

On a whole, if this is implemented, the process will for sure simplify the GST return filing process but at the same time keep any possible revenue evasion in check.

The framework of the scheme, a direct tax payment, and quarterly return filing scheme for businesses with less than Rs 1.5 crore in sales, is also likely to undergo some changes, with the Council giving its approval to make the scheme more attractive and reduce tax evasion.

These changes will help the large registered dealers to purchase from small composition scheme dealers and also avail input tax credit.

New Delhi: Off late, the Goods and Services Tax Council (GSTCouncil) cut tax rates on 29 products and 54 services. The same was announced at the 25th meeting of the council, wherein they agreed to make the process of filing tax returns simpler.
At the meeting chaired by FM Arun Jaitley, the federal indirect tax body cut GST rates on products, such as household cooking gas cylinders from private suppliers and precious stones and pre-owned vehicles.

Services that had a GST rate cut are like legal assistance provided to the government and its agencies, admission to theme parks and small housekeeping services provided by e-commerce firms, such as UrbanClap. These rate cuts will impact the revenue adjustment of Rs 1,100 to 1,200 crore.

This business call for simplifying the process of GST return filing comes in the middle of revenue loss worries expressed by states, primarily because of tax evasion. Easing the process can result in stopping this evasion.

A final decision on the same is yet to be made with respect to the revamping of the return filing process. The GST Council is thinking of doing away with forms such as GSTR 2, dealing with purchases, and GSTR 3, a comprehensive return. Instead of this, the already existing simpler summary return form GSTR 3B will continue, which will be supplemented with details from invoices to be uploaded by suppliers on the GST Network (GSTN). This will enable invoice matching and check tax evasion.

On a whole, if this is implemented, the process will for sure simplify the GST return filing process but at the same time keep any possible revenue evasion in check.

The framework of the scheme, a direct tax payment, and quarterly return filing scheme for businesses with less than Rs 1.5 crore in sales, is also likely to undergo some changes, with the Council giving its approval to make the scheme more attractive and reduce tax evasion.

These changes will help the large registered dealers to purchase from small composition scheme dealers and also avail input tax credit.
Moreover, in the composition scheme, traders, manufacturers and restaurants can pay tax at 1%, 2% and 5%, respectively, under the new indirect tax system. Businesses opting for the composition scheme also face an easy compliance burden as they have to file returns just once in a quarter as compared to the monthly returns to be filed by other businesses.

According to this criterion discussed in the Council, all big registered dealers can pay the tax that is equal to the composition rate on purchases made from small unregistered dealers. Termed as the reverse charge mechanism, this scheme will enable the buyer to avail of input tax credit.

In addition to this, the composition dealer will not have to pay the tax on the purchases made by the registered dealers.

At present, 1.7 million traders are registered under the composition scheme and paid only Rs 307 crore in taxes in the September quarter, reflecting large-scale under-reporting.

Source:https://timesofindia.indiatimes.com/business/india-business/council-cuts-gst-rate-cuts-on-29-items-and-54-services-under-composition-scheme/articleshow/62752363.cms
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