GST may be recast next week to make compliance easier
NEW DELHI: India is set to unveil another revamp of the goods and services tax (GST) regime next week aimed at making compliance simpler. The GST Council meeting on January 18 is expected to take up changes in the definitions of terms such as supply and handicrafts as part of this effort besides replacing the three forms that need to be submitted with one, said two government officials aware of the development. It may also drop the requirement for upfront invoice matching, they said. “These changes would be taken up by the council at the upcoming meeting,” said one of the officials.
This will be the second significant overhaul of GST after a November rejig that saw the tax rate on 178 household goods being lowered and that on restaurants brought down to 5%.Read more ↓
India rolled out GST, which replaces multiple state and central taxes and cesses, on July 1. The levy has been tweaked over the past few months based on feedback from businesses.
The council had set up two committees – one to review GST law and procedures and the second to formulate a definition for handicraft. Both have submitted their reports to the council secretariat and it will now take a final call on the recommendations.
The law review committee has recommended tweaks in various provisions to address certain issues, including the definition of supply. GST is levied on the supply of goods and services and the move is aimed at clearing up ambiguities, particularly with respect to services, that had been raised by industry.
A number of provisions related to exports and special economic zones are also likely to be amended to provide more clarity.
The panel on handicrafts has mooted a new definition of what goods should be classified as such to distinguish them from items that are handmade. It has also proposed a reduction in the GST rate for jobwork on handicraft items to 5%.
“Combining three returns into a one will surely simplify the system,” said Pratik Jain, indirect tax leader, PwC. “However, it’s important to ensure that the concept of invoice matching through the GSTN platform continues to avoid the need for the businesses to deal with it at the time of audit or assessment.”
“Convergence of three return forms into one is a step in the right direction and in line with international best practices. None of the countries amongst 160 odd countries under GST mandate three monthly returns,” said Harpreet Singh, partner, KPMG.
Source by indiatimes..Share: