Finance Minister Arun Jaitley-led GST Council will meet today to discuss a number of issues ranging from simplification of GST Returns forms to digital payments discount and sugar cess. The council will meet through video conferencing. The 27th GST Council meet is likely to have the finance ministers of all the states.
Here are some of the issues that are likely to be on the agenda today:
1. Simpler GST Returns forms: This has been under discussion for a while now. However, revenue officers and Infosys Chairman Nandan Nilekani, who is being consulted regarding the issue, have not agreed upon a simplified form yet. Bihar Deputy CM Sushil Modi with a Group of Ministers (GoM) under him is going to put three models of the new simplified form in front of the Council.
2. Sugar cess: The government is planning to impose a sugar cess of maximum Rs 3 on each kg sold by sugar companies. It is likely to help raise Rs 1,540 crore that would be paid to cane farmers on behalf of mills. The sugar cess would be added on top of the 5% GST that is charged on sugar.
3. Digital payments discount: This proposal has been mulled over since November. If this follows through, payments made for GST transactions would be incentivised. Two prices – one with normal GST charges and the other with a concessional 2% GST rate subject to a maximum of Rs 100 per transaction would be offered.
4. GSTN future: Jaitley had earlier this month asked Finance Secretary Hasmukh Adhia to “examine the possibility” of converting GSTN into a majority government company or a 100% government company. GSTN provides the IT backbone for the new indirect tax regime. Currently, five private financial institutions – HDFC, HDFC Bank, ICICI Bank, NSE Strategic Investment Co and LIC Housing Finance Ltd – hold 51% stake in GSTN, which was incorporated on March 28, 2013, in the erstwhile UPA regime.
5. Reverse Charge Mechanism: Reverse charge is a mechanism that puts the burden of taxes on the recipient of goods or services rather than on the supplier. If a registered dealer buys goods from one not registered under GST then the applicable charges would be on the registered dealer. As such, registered dealers were unwilling to buy from smaller dealers and bear the burden of taxes, in turn leading to smaller dealers running out of business. The GST Council had temporarily scrapped RCM in the wake of this.
These crucial discussions are coming at a time when GST revenues crossed Rs 1 lakh crore for the first time. As mentioned by the Ministry of Finance, the total gross GST revenue collected in April was Rs 1,03,458 crore.businesstoday