Finance Minister Nirmala Sitharaman will head her first GST Council meeting on June 21. (Photo: PTI)

GST Council May Extend National Anti-Profiteering Authority For One More Year

The Goods and Services Tax Council is likely to extend till Nov. 30, 2020 the tenure of National Anti-profiteering Authority, which deals with customer complaints regarding not receiving GST rate cut benefits, said a government official familiar with the matter.

A decision to this effect is likely to be taken during the 35th GST Council meeting—the first under Finance Minister Nirmala Sitharaman—on June 21. The federal tax body is also likely to consider a proposal to set up one appellate tribunal for northeastern states, and another one for all union territories.

Besides, the GST Council would discuss a proposal to levy GST on extra-neutral alcohol, which is used for manufacturing alcoholic liquor for human consumption, the official said. The GST Council meeting will also see discussions on issuance of e-invoice by entities with turnover of over Rs 50 crore for B2B sales in a bid to curb GST evasion.

Extra-neutral alcohol is a derivative of sugarcane molasses (95 percent high-purity ethyl alcohol) and is not an alcoholic liquor for human consumption but can be used as raw material or input, after processing and substantial dilution, in the production of whisky, gin, country liquor, etc.

The Finance Ministry is of the view that the National Anti-Profiteering Authority should be given an extension of one year till Nov. 30, 2020, as it continues to receive complaints of profiteering by companies, the official quoted above said.

The NAA is keen for a two-year extension, the official said, adding the final call will be taken by the GST Council in its meeting on June 21. Earlier, the meeting was scheduled for June 20, but has now been postponed to June 21.

Soon after the GST was rolled out from July 1, 2017, the government had approved setting up of the NAA for two years to deal with complaints by consumers against companies for not passing on GST rate cut benefits.

The NAA came into existence on Nov. 30, 2017, after its Chairman BN Sharma assumed charge. So far, the NAA has passed 67 orders in various cases.

The GST law provides for setting up of benches of appellate tribunal in all states. Although 18 states have got the approval to set up appellate benches, none of these states have operationalised them. The GST Council in its June 21 meeting is likely to approve the proposals of Delhi, Odisha and Telangana to set up appellate tribunal benches.

The GST Council will also take a call on setting up a combined bench for all north-eastern states as well as one bench to deal with appeal cases in six Union Territories -- Chandigarh, Puducherry, Lakshadweep, Daman and Diu, Dadra and Nagar Haveli, and Andaman and Nicobar Islands, the official said.

With regard to bringing ENA under GST, states have divergent views on levying GST. Larger states like West Bengal, Rajasthan, Haryana, Tamil Nadu, Karnataka, Andhra Pradesh and Maharashtra have been of the view that ENA should be out of GST.

States levy Value Added Tax and Central Sales Tax on ENA and states will have to forgo the right to tax the product if it is brought under GST. The GST Council had earlier sought the opinion of the Attorney General on legality of imposing GST on ENA. The AG had then opined that since ENA is not consumed directly by people, GST can be imposed on it. Currently, potable alcohol is out of the ambit of GST and states are free to levy taxes on them.

Bloomberg Quint

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