Ashok Kumar Chopra

GST Council meeting concluded on 03rd June 2017 have confirmed July 1, 2017 being the appointed day for GST to go live in India. In the recent past, On the issue of GST Roll out date, Our Honourable Finance Minister and chairman of the GST Council Shri Arun Jaitley had on various forums indicated that the Government is fully prepared to implement GST from 1st July, 2017. The GST Council have decided the same. With this all speculations on shifting the GST roll out date either to 1st Aug or 1st September 2017 or to some other date came to an end.

In this meeting during break while talking to the media persons, Kerala Finance Minister Mr. Thomas Isaac said “We were discussing the rules and they have been completed. Transition Rules have been cleared and everybody has agreed for July 1 roll out.

The Council was to decide GST Rates on six categories of commodities like textile, footwear, Biris, Precious metals, Biscuits and Agriculture Machinery. These were kept in pending list while deciding the tax rates on other commodities in the 14th meeting of the council on 18th and 19th May 2017

The major decisions taken at the 15th GST Council meeting are :

  • GST Rates on the following commodities were finalized :
Commodity GST Rate
Gold and Diamond 3%
Rough Diamond 0.25%
Man Made Apparel upto Rs 1000 5%
Man Made Apparel above Rs 1000 12%
Footwear upto Rs.500 5%
Footwear above Rs.500 18%
Readymade Garments 12%
Cotton and natural fiber 5%
Silk and Jute Fiber 0%
Man made Fiber and yarn 18%
All types of Biscuits 18%
Beedi 28% With no cess
Tendu Leaves 18%
Branded and Packaged Food items 5%
Solar Panel Equipments 5%
Agriculture Machinery which presently taxed at 13.79% 12%
Agriculture Machinery which presently taxed at 8.79% 5%

*The matter of Lottery tax has been discussed in this meeting but no decision was taken on this. The council may decide the rates on this in the next meeting.

♣ The council approved Transition Rules and Return forms Rules.

♣ On the stock lying with traders on the GST Roll out day, 40% of the CGST and SGST dues on goods in stock was allowed in the draft Transition Rules. This 40% allowance was pinching the Industry and Industry finding it very low. There was a strong demand to relax this limit at least to 60% Accepting this ,subject to the relevant provisions of the transition rules ,the council approved following amendments :

1. Traders and retailers to be allowed to take input tax credit of 60% against CGST and SGST dues on those stock items (with no documents of evidence of payment of tax) lying with them as on the date preceding the appointed day where GST Rate exceeds 18%

2. Traders and retailers to be allowed to take input tax credit of 40% against CGST and SGST dues on those stock items (with no documents of evidence of payment of tax) lying with them as on the date preceding the appointed day where GST Rate is 18% or less.

♣ The council also decided to set up a committee comprising the officials both from the Central Government and state Governments which will look into the complaints pertaining to anti profiteering clause that prevents registered persons from making undue profit in GST regime. Section 171 of CGST Act 2017 contains the provisions of Anti profiteering measures. Section 171(1) Any reduction in rate of tax on any supply of goods or service or the benefit of input tax credit shall be passed on to recipient by way of commensurate reduction in the price. The provisions simply say that there should be commensurate reductions in the prices. How this commensurate reduction will be measured is something what is required to be clarified well in time to avoid complications a later stages.

The next meeting of the GST Council will be held on 11th June 2017 to review the GST rates based on the representation received from Industry in case the rate fitment committee feels that there is a significant increase in the GST rate from the present tax rate. In addition, the council will also take decision of finalization of rules on E-Way bill and Accounts & Records.

Disclaimer : The contents of this write-up is based on media reports on 15th GST council meeting and are solely for information and knowledge and does not constitute any professional advice or recommendation. Author does not accept any liability for any loss or damage of any kind arising out of this information contained in the write-up and any action taken based thereon.

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One Comment

  1. Mukesh Ghiya says:

    my query is regarding transitionary provisions, and ITC on goods held in stock as on 30 jun 2017 before GST and transition to GST on 1 july 2017.
    We will be holding a closing stock of goods which are manufactured in BAddi, Himachal pradesh where excise duty is exempted,we are having invoices of these goods purchased from there Distributor which does not show any excise duty, will we get the ITC of 60% on CGSt on sale of these goods in GST era.

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