GST Council Decisions Live Updates: GST Council Hikes Tax Rate On Mobile Phones, Gives Some Relief To MSMEs
Higher Rate On Mobile Phones, Some Relief For MSMEs
The Goods and Services Tax on mobile phones and specified parts has been raised to 18 percent from 12 percent earlier, at the 39th meeting of the GST Council today.
This was done to correct an inversion problem that the rate fitment committee was asked to look into, Finance Minister Nirmala Sitharaman said in a media conference after the meeting. The issue was that the refunds being paid were more than the tax being collected on these items, she said.
The finance minister said that there are other such items where this problem exists. Today, the council only corrected the rate on mobile phones. If the need arises, it will consider rationalising rates of other such items in subsequent meetings.
Other key decisions:
- GST on matchsticks rationalised.
- Retrospective change to GST law for interest charged on late payment.
- GSTR-9C filing deadline for small businesses relaxed.
- Due to date for filing annual return and reconciliation statement for FY19 extended.
Watch the finance minister’s press conference after the meeting here.
Over Rs 1.2 Lakh Crore Released To State Till Now
Finance Minister said that Rs 78,000 crore has been collected as compensation cess. The total compensation released to states is over Rs 1.2 lakh crore, she said.
Small Businesses Get Some Relief
The GST Council has relaxed the deadline for GSTR-9C filing for small businesses.
- For those with annual turnover below Rs 5 crore, the due date for filing annual return and reconciliation statement for FY19 was extended to June 30, 2020.
- For those with annual turnover below Rs 2 crore in FY18 and FY19, no late fee will be charged.
Procedural Changes Made By GST Council
The GST Council also decided that the interest for delay in payment of GST will now be charged on the net cash tax liability instead of gross with effect from July 1, 2017. The law will be amended for this retrospectively.
- Relaxation to MSMEs from furnishing a reconciliation statement GSTR-9C for FY 2018-19 for all taxpayers having aggregate turnover below Rs 5 crore.
- Due date for filing annual return and reconciliation statement for FY 2018-19 to be extended to June 30, 2020 for those with turnover less than Rs 5 crore.
- For those less than Rs 2 crore aggregate turnover in FY 2017-18 and FY 2018-19, there won’t be any late fee charged.
- Know your supplier being introduced so that every business have information of suppliers they are in business with.
All Rate Changes To Be Effective For April 1
All changes announced at today’s GST Council meeting will come into effect from April, 2020.
GST For Maintenance And Repair For Aircraft Reduced
The tax rate on maintenance, repair and overhaul of aviation was cut from 18 percent to 5 percent. This may assist in setting up of MRO services in India, Sitharaman said.