30th GST Council meeting came out with some positive and good steps to ease compliance of GST and also wrinkle out the hindrances in the implementation of GST. The 29th GST Council meeting focused on Digital Payments and Empowering MSME sector.
In the 30th Meeting of the GST council, the council came out with two objectives achieved: Formation of the Group of Ministers (GoM) and Discussed the revenue position of all states.
Expectations of the 30th GST Council Meeting
- Rationing the rates of GST on Cruise Tourism
The GST council expects to come to a consensus on rationalizing the GST Rates on the facilities of Cruise tourism. The government might also go as far as completing exempting the current 18% tax for cruise tourism.
- Simplification and Automation of GSTR 9C (Reconciliation of Input Tax Credit and Certification)
GSTR 9C is the reconciliation statement to be filed with the Annual Return GSTR 9 which was recently notified by the government. However, the GST council will discuss measures to inculcate the automation as well as simplification of the form. It will result in lower costs and efforts for the taxpayer
- Compliances for MSMEs
The 29th GST Council Meeting was based around the MSME sector and empowering them with concessions and helping with compliances like MSME Registration. The GST council will basically review the MSME reports produced by the committee appointed to look after MSME affairs
- Flood Relief Cess for the State of Kerala
Expectations are that the council will definitely address the unfortunate Kerala floods and how the government can offer additional relief. Kerala government’s plea to levy a cess to amass appropriate resources to help recover the cost of losses incurred during the floods. However, adding extra taxes to already aggrieved Kerala inhabitants is not practical. Therefore, further clarification is needed
- GST on ATF(Aviation Turbine Fuel)
Mr. Arun Jaitley, the Finance Minister has pitched to introduce the Aviation Turbine Fuel(ATF) under GST . Rising fuel prices and lowering air tickets prices have pushed airline companies into crisis mode. The decision to bring ATF under the GST regime will help regulate fuel prices. This decision will help states with more number of airports.
30th GST Council Meeting Main Highlights
Formation of Group of Ministers(GoM)
The GST council appointed a 7-member Group of Ministers with the 30th GST council meeting tasked to look into the verticals of GST and submit a report of recommendations to the GST council latest by 31st October 2018 under these topics.
- Imposition of cess under GST to provide relief for Kerala Floods. The Government of Kerala made a pitch to the GST council to levy a 10% charge (cess) in an attempt to provide relief for the losses incurred during Kerala floods.
- Temporary taxation under GST to help out states in urgent requirement of funds. The GoM has also contemplated about long-term implications of levying state cess. The cess specified will be levied on select items for a temporary period subject to a notification. In spite of this, an additional 1% tax on selected items was also discussed in this GST council meeting.
- The GoM will also be overlooking over the decision of whether to implicate the additional tax in the concerned state or impose taxes on an all-over India basis. The committee will also decide upon the class of goods which will be subject to this extra taxation.
- The Group of Ministers will also aim to look into whether the National Disaster Response Fund (NDRF) / State Disaster Response Fund (SDRF) mechanisms will be able to aid and assist in times of severe need for eg. Kerala floods. The GoM will also strive to find situations and conditions where calamity taxes can be imposed legally under GST.
Revenue Position Discussion of all States
GST collections have been recorded at an all-time high crossing expected targets for all north-eastern states. A panel of analysts has been tasked with conducting a research on all the states of the country with regards to GST and help suggest effective methods to bridge the gap between target revenue and revenue generated till now.
The graph of the GST revenue collection indicated a shortfall of 16% in the first year of the GST implementation. The shortfall has reduced a lot and is down to 13% in April- Aug 2018. Mr. Arun Jaitley is positive that the GST deficit will neutralize within 5 years of the rollout of GST . With regards to these facts, the rate cuts in the goods and services will be reliant heavily on revenue collection in all states in the coming months.
Thus, in the 30th GST council meeting, the GST council discussed revenue situations of the states, calamity tax, and MSMEs. The next GST council meeting is supposedly in November, 2018.
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