GST Updates – Council 27th Meeting Update dated – 04-May-2018

GST council meet today. It was 27th meeting of GST council. There were two major decisions in GST Council today which were regarding *one monthly return* for all dealers except some dealers and *change in Shareholding Pattern of GSTN Network* . There were two more points discussed like incentive to promote digital payments and cess on sugar. Final Decision on these two shall be taken later.

Summary of today’s discussion is as follows:

1. *One Monthly Return* :

a. For all Taxpayers EXCEPT Composition dealers & dealers having NIL transactions shall file monthly return.

b. Return Filing dates shall be staggered based on turnover of registered person to manage load on IT System.

c. Composition dealers & dealers having NIL transactions shall have facility to file QUATERLY Return.

2. *Unidirectional Flow of Invoices* :

a. Invoices for B2B transaction shall need to use HSN at four digit level or more to achieve uniformity in the reporting systems.

b. Seller can upload invoices anytime during the month.

c. Buyer would also be able to continuously see the uploaded invoices during the month.

3. *Simple Return design and easy IT interface* :

a. The B2B dealers will have to fill invoicewise details of the outward supply made by them.

b. On the basis of invoicewise details, tax liability will be calculated automatically.

c. ITC shall be also calculated by the system on the basis of Invoices uploaded by the seller (as per above mentioned Point-2)

4. *No Automatic reversal of Credit* :

a. There shall not be any automatic reversal of ITC from buyer due to non-payment of tax by the seller.

b. In case of the *default in payment of tax by the seller* , recovery shall be made from seller .

c. However in case of exceptional situations reversal of credit from buyer shall also be the option before authorities. Such exceptional situations could be:

i. Dealer Missing

ii. Closure of Business

iii. Supplier not having adequate assets etc.

5. *TRANSITION* :

a. *Stage-1* : Present filing of GSTR-1 & GSTR-3B shall continue. GSTR-2 & GSTR-3 shall remain suspended.

b. *Stage-2* : The new return will have facility for invoice-wise data upload and also facility for claiming ITC on basis of self-declaration basis, as in case of GSTR-3B now.

c. *Stage-3* : After 6 months of Stage-2, *the facility of provisional credit will be withdrawn* and ITC shall be limited to the invoices uploaded by the seller.

6. *Content of Returns* :

a. Return shall be simplified also by reducing the content/information required to be filed.

b. Law Committee will finalize details of design of return.

7. *Change in Shareholding Pattern of GSTN*

a. Currently Central Government and State Governments holds 24.50% each and remaining 51% are held by Non-Government Institutions.

b. Council has decided to acquire entire 51% equity held by Non-Government Institutions in GSTN equally by the Centre & the State governments.

c. Post acquisitions  GSTN Board shall be allowed to continue the existing staff at existing terms and conditions for the period upto 5 years.

8. *Incentive to promote Digital Transactions*

a. Council has discussed (NOT FINALIZED) in detail the proposal of a concession of 2% in GST Rate on B2B supplies for which payment is made through cheque or digital mode.

b. Where GST Rate is 3% or more, 1% each applicable from CGST & SGST.

c. Maximum celling of incentive is Rs. 100/- per transactions.

9. *Imposition of Sugar Cess over and above 5% GST*

a. Keeping in view of record production of   sugar in the current sugar season and consequent depressed sugar prices, Council discussed the *imposition of sugar cess* .

b. Council has recommended for *setting up of a Group of Ministers from State* to look into the proposal & *make recommendations within two week.*