GST Council Meeting on 6th October – Issues to be taken up

meeting of gst councilThe 22nd meeting of the GST Council, chaired by Arun Jaitley, will be held on 6 October to deliberate on GSTN glitches and ironing out issues faced by exporters, a ministry official has said. The meeting was scheduled to be held on 24 October but was preponed in view of the engagements following Diwali festival.

  1. The issues that are expected to be discussed include the findings of the Group of Minister (GoM) on technical glitches on the GST Network portal.

  2. The GST Council would also decide on the integrated Goods and Services Tax refund cases. The GST Council meeting on Friday will take important decisions on integrated GST refund and ease of doing business for small tax payers. Measures for the swift processing of refund claims, which will be taken up at a meeting of the council on Friday, will improve the liquidity of exporters. Exporters are likely to be allowed refunds without waiting for the invoice details of raw materials and other purchases, but based on the summary of all transactions and details of exports made.
  3. Structural changes in the GST regime will also be deliberated in the upcoming Council meeting with the member states from across the country and will be announced by Union Finance Minister Arun Jaitley. The revamped GSTN, which can handle 80,000 returns in a hour, will be enhanced to process 130,000 returns per hour by this month-end. 
  4. About 20 lakh traders who have not filed returns on purchase and sales will be alerted through SMS to file before the last date, which Modi clarified would not be extended. 
  5. Infosys, which maintains the portal, will depute its technical personnel to all the states across the country for assisting their officials and tax payers in operating the system. 
  6. Exporters have made a series of demands including exemption of imported raw materials from GST rather than having to pay tax first and claiming a refund later. They say they are losing their competitive edge and are facing a liquidity crunch due to delays in GST refunds and upfront payment of GST on inputs for exports.

  7. Exporters may be provided GST refund based on GSTR-1 (the return relating to supplies) and GSTR-3B (a summary of transactions) so that the cash flow to export sector is maintained.

  8. There could be a change in return filing cycle for small tax payers. A quarterly return filing could be implemented for small businesses. However, what could be a business’ annual turnover cut off for it to be called a small taxpayer, will be decided by the Council on Friday. 

  9. The Council may reopen registration for composition scheme for the third time.The scheme is an alternate method of taxation, which allows small businesses with annual turnover up to Rs 75 lakhs, to pay tax at a concessional rate, as well as reduce the compliance cost. the enrollment into the plan is however, optional.

  10. Council may also defer the reverse charge mechanism (RCM), that has been especially bothering the small tax payers, the first official said. Reverse charge is a mechanism where the recipient of the good or service will have to pay GST, which is otherwise paid by the supplier. The charge is applicable on a registered dealer, if he buys goods from a dealer not registered under GST. However, the receiver of the good is eligible for input tax credit, while the unregistered dealer is not.Businesses are getting affected by RCM. Registered taxpayers are not willing to take the burden of paying tax, while small or unregistered taxpayers are running out of business if registered dealers are not buying goods from them. Hence, there could be a decision towards deferring RCM for at least some time.

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