Goods and Service tax council (“GST Council”) in its 27th GST Council Meeting held on 4th May 2018 finally approved the filing of new return based on the recommendations of the Group of Ministers on IT. The new recommendations are likely to simply compliance under GST.
The key feature of new return is as under:
1. 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.
2. 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.
3. Simplified return: Based on uploaded sales details, the system will automatically compute GST liability. The system will automatically calculate Input tax credit based on sales invoice uploaded by the supplier.
4. In case of default in the payment of GST by the supplier, credit will not be denied to the buyer. Recovery of such tax will be made from supplier primarily. However, in certain cases like non-availability of supplier or discontinuation of business by the supplier, credit may be disallowed to a buyer.
5. 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. Similar safeguards would be built with regard to newly registered dealers also.
6. Transition to new GST return will be in 3 stages:
Stage-2: In new return, 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.
7. To keep return form simple, reduced information/content will be required in return.
Apart from above, GST council in 27th GST Council Meeting has decided to make Goods and service tax network- Special Purpose vehicle (GSTN-SPV) a government body by increasing its stake in it from 49% to 100%. Presently, 49% equity in GSTN is held by the government (24.5% each by the state government and center government) and rest 51% equity is held by non-government institutions.
Further to promote digital transaction, the GST Council today has discussed a proposal of a concession of 2% in GST rate [if GST rate is 3% or more] on B2C supplies, if payment is made for such supply through cheque or digital mode, subject to a ceiling of Rs. 100 per transaction. However, it is yet to be approved.
Keeping in view the record production of sugar in the current sugar season, and consequent depressed sugar prices and build-up of sugarcane arrears, the GST Council discussed the issue of imposition of sugar cess over and above 5% GST and reduction in GST rate on ethanol. However, it is yet to be approved.