On 4th May 2018, Goods and Service Tax Council (GST Council) in its 27th Gst Council Meeting finally approved the filling of new return based on the recommendations of the Group of Ministers on IT. Along with that it also announced a few rate changes and some structural changes in the shareholding pattern on the GSTN.

The key feature of new return is as under:

• Periodicity: Under the new regime, a single return will be filed by every taxpayer, except few like composition dealer, on monthly basis unlike multiple returns filing under the existing system. Due date of return filing will depend upon turnover. A dealer with nil transaction may file a quarterly return.
• Under the new system, uploading of invoices will be unidirectional by the seller. Seller may upload such invoice at any time during the month and such invoice will be available to the buyer on a real-time basis. Buyer will not be required to upload purchase invoices separately. HSN of 4 digits or more will be required on all B2B invoices to achieve uniformity.
• Simplified return: The system will automatically compute GST liability based on the uploaded sales details and it will also automatically calculate Input tax credit based on sales invoice uploaded by the supplier.
• To control misuse of Input Tax credit, person defaulted in payment of GST will not be allowed to upload sales invoice and accordingly, no credit will be available to the buyer on purchases made from such supplier.

Transition to new GST return will be in 3 stages:

Stage-1: will be the present system of filing of GSTR-1 and GSTR 3B. GSTR-2 and GSTR-3 will continue to suspend. This stage will continue for not more than 6 months.

Stage-2: The new return will have an invoice wise sales uploading facility will be available; however, Input Tax Credit will be available on a self-declaration basis. This phase will continue for next 6 months.

Stage-3: In this stage, credit will be automatically computed by the system based on invoices uploaded by the supplier and window for provisional credit will close.

Rates:

• Sugar Cess implementation has been postponed. The government believes that for the benefit of the farmers there should be a better way to increase revenue.
• Duties on Ethanol – Reduction in rate suggested.
• A group of ministers is expected to work on above two mentioned points and make recommendations within two weeks.

De-Privatization of GST

With the government acquiring the remaining 51% equity currently held by the Non-Governmental Institutions so now the GSTN is a government-owned company. In future, the Central Government will hold 50% and State Governments the balance 50% of the stakeholding.

There is a scope for better employment as GSTN looks forward to recruiting more people

Incentives on digital payments

Incentives here may need more time to come in force. For the next council meet, A 5 member council will work. The cap of the incentive will be Rs. 100 per transaction and the proposal is to give a concession of 2% on GST rates that are more than 3% on B2C supplies.

Other points:

• Real Estate/transfer of property will be included in the GST regime
• Amendment of the ITC provision in the GST which will enable any business to take credit on any business-related expenses (employee transport etc.)
• Exemptions for payments made by employees for the services received from the employers (e.g.: canteen services)
• Some clarity is expected from the council which will be based on various adjudications on anti-profiteering norms under GST
• Digital transactions will be increased by providing cash-backs, discounts, credits etc.

In short, the 27th GST Council meeting was a major game changer, as far as the simplified return filing process is concerned. Given the various initiatives discussed, proposed and finalized at the meeting, life for the business is surely bound to become simpler as far as GST compliance is concerned.

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