In some relief to the automobile industry, the Goods and Services Tax Council on Saturday decided to impose only a part of the total 10 percent hike in the compensation cess on motor vehicles. The Council also lowered the tax rate on 30 household items and extended the date for filing tax returns.
Here are the key takeaways:
Hike In Compensation Cess On Cars
The GST Council increased the effective tax (rate and cess) on certain categories of automobiles to ensure the tax burden on them is similar to that imposed prior to the implementation of GST.
Finance Minister Arun Jaitley told reporters at the press briefing this was in an effort to maintain “equivalence”. He also pointed out that despite the increase in tax burden some relief has been allowed for consumers.
GST Rates Revised For 30 Items
Jaitley said the tax rate on about 30 items have been lowered after anomalies in the fixation of rates were pointed out. These items include:
- Dried tamarind
- Roasted gram
- Custard powder
- Idli dosa batter
- Plastic raincoats (Reduced to 18 percent from 28 percent)
- Rubber bands (Reduced to 12 percent from 28 percent)
Tighter Norms For Branded Food Companies
The Council has amended the framework for branded food products to prevent abuse by some manufacturers.
So far, some unbranded food items, sold loose, attracted a GST rate of zero percent, whereas branded food was taxed at 5 percent. The definition of branded covered items having a registered trademark. As a result, a few food companies had started to deregister their trademarks and sell the goods under deregistered trademarks or the corporate brand to gain a tax advantage, the finance minister said.
Hence the GST Council has made an amendment to say that if food stuff being sold falls into any one of two categories the applicable tax rate would be 5 percent. The two categories are:
- If on May 15, 2017 the item had a registered trademark
- Or, if the item had a trademark or name on which it is entitled to maintain an actionable claim
Overall, the GST collection has been quite robust, with more than 70 percent of the eligible registrants having filed their returns for month of July, Jaitley said.
Approximately Rs 95,000 crore has been collected in July and some spillover of value added tax collections will also be added, the finance minister added.
The meeting, the second since the implementation of GST, reviewed the functioning of GST Network – the IT backbone and portal for registration and tax returns under the GST regime.
GSTN on "two-three occasions got overloaded. These are transient challenges and glitches in technology. The council has decided to appoint a committee to interact with GSTN for smooth transition", the finance minister said.
Since the work is huge, the period of filing of returns has been extended, he added.
Deadlines For Filing GST Returns Extended
The Council decided that GSTR-3B will continue to filed for the months of August to December but gave extra time of up to a few months for filing of certain forms for the month of July 2017.
For taxpayers with aggregate turnover of more than Rs 100 crore:
GSTR-1: Revised due date - October 3, 2017
GSTR-1: Revised due date - October 10 , 2017
GSTR-2: Revised due date - October 31, 2017
GSTR-3: Revised due date - November 10, 2017
No change has been made to the deadline of 18 October, 2017 for GSTR-4. This form has to be filed for the July -September 2017 period. The media statement issued by the government said the GST Council has decided that table 4 under GSTR-4 is not to be filled for the quarter, and that the requirement of GSTR-4A for this quarter has been dispensed with.
GSTR-6: Revised due date - October 13, 2017
The due date for submission of the GST TRAN-1 form has been extended by one month to October 31, 2017, the media statement added.
The registration of persons liable to deduct tax at source and collect tax at source will commence from 18 September, 2017. The date from which the tax will be deducted or collected has yet to be notified.
- Handicraft traders who sell to other states will not have to register if their turnover is below Rs 20 lakh.
- Khadi fabric sold through KVIC stores will be exempted from GST.