The GST Council and Tax Reform

The 23^rd GST council meeting in November this year promised many tax reform agendas including reduction in tax returns. Find out how far expectations were met.

After many delays and hiccups, the long awaited reforms to the GST regime in India were finally announced and published in the official gazette. On the 10^th of November this year, the GST Council met for its 23^rd session and put in motion a bevy of changes to existing GST rates and tax slabs.

The highest tax bracket of 28% will no longer contain chewing gum or chocolates – white or brown, containing or not containing cocoa, malt extracts, meal preparations involving flour, groats, starch etc. and having a limited percentage of cocoa and so on. After the proposed modifications were formally given effect to on November the 15^th the number of items in 28% slab has reduced to a mere 50. It remains to be seen whether corresponding MRPs go down in proportion. Already, hotels and restaurants have refused a downward revision in service rates.

Firms and businesses not earning annual gross incomes of more than Rupees 1.5 crore can file their GSTR-1 tax return forms by December 31, 2017 and February 15, 2018 for the second and third quarters respectively. Those exceeding this ceiling may also file their GSTR-1 income returns by December 31 for the months of July to October.

Earlier in the year, the government had elaborated tax exemptions on incoming advances for supply of goods worth less than Rupees 1.5 crore. Now 1.5 crore would also be the ceiling for those who are eligible to opt for the GST composition scheme. Also, providers of services that make less than Rupees 5 lakh in a year can opt for the Composition Scheme. Thus cash flow and working capital deficits would be undercut.

The one-time tax return form, GSTR-3B can now be filed till the 20^th of December this year and would cease to be compulsory after March next year. Mandatory GST registration is no longer a compliance factor for services making less than Rupees 20, 00, 000 in a year.

Simplifications have also been made to the application modes for Advance rulings where transactions with a foreign entity is concerned.

Notwithstanding these welcome changes, GST implementation continues to face shortcomings and more on this will be discussed in an appropriate post.

Take advantage of the online revolution to get CA assistance from a CA to efile income tax returns via an online tax platform such as AllindiaITR, a product of Corwhite Solutions Private Limited.