Analysis/Rational of Important Decisions/Proposal at 35th Meeting of GST Council.
1. Proposal of E- Invoicing
The Council also decided to introduce electronic invoicing system in a phase-wise manner for B2B transactions. E-invoicing is a rapidly expanding technology which would help taxpayers in backward integration and automation of tax relevant processes. It would also help tax authorities in combating the menace of tax evasion. The Phase 1 is proposed to be voluntary and it shall be rolled out from Jan 2020.
Analysis
Now a days we listen lot about E – Invoicing in news articles because this can be game changer with respect to whole system as till time we first do accounting work and then prepare reports and file return but if E-Invoicing will start than Govt. will get data on real time basis and data will be accurate.
Due to E-Invoicing compliance cost going to reduce as E-Invoicing is one type of return only.
As data is available on real time basis assessment time and cost will also reduce as there is no manipulation of data available with department can possible.
There is various methods are used for Tax evasion.
1. Increase or decrease in Stock according to Tax payment capacity
2. Deferment of Time of Supply provisions by recording sales or purchases after actual date.
3. Increase in Expenditure by recording incorrect expenditures which are merely book entries.
4. Taking Wrong Input Tax Credit
E-Invoicing will fight against above mentioned all means of Tax Evasion.
Challenges against E- Invoicing.
Digital Literacy is very important factor as this E-Invoicing is completely on Digital Platform and India still not completely ready for this roll out as we does not digitally literate population.
Still India is incurring huge cost on computers – Laptops so which is also one factor where we need to think before making this permanent as we need to achieve lot in area of Infrastructure.
2. Date extension for GST Audit
Annual Return (GSTR 9 / 9A) and Audit (GSTR 9C) has been extended from 30.06.2019 to 31.08.2019.
Analysis
Due to complexity of GST Annual return and GST Audit Tax payers and CAs are facing lot of difficulties in conducting audit for Year 2017-18.
Still Extension of due date is not solution for this problem as tax payers and CA are waiting for clarity on Annual return and Audit forms.
3. Anti Profiteering Mechanism extended for 2 Years.
Anti-profiteering mechanism which was to end on 30.06.2019 has been extended for another 2 years till 2021.
Analysis
As govt. is still want to simplify and juggle between rate of taxes they need to monitor that effect of rate of tax will be given properly so this move is for the benefit of consumers.
4. In the meeting held today, that is 21st June, 2019, the Council has recommended following GST rate related changes on supply of goods and services.
i. Electric Vehicles
On issues relating to GST concessions on electric vehicle, charger and hiring of electric vehicle, the Council recommended that the issue be examined in detail by the Fitment Committee and brought before the Council in the next meeting.
Analysis
On this same day Niti Ayog also set targets for Auto makers about Electronic vehicles and demanded their plan about it as now a days many countries transport system are running on electronic vehicles. If rate cut by Fitment committee is approved than this step is appreciated.
Looking at the environment perspective we needed Electrical vehicles as fast possible on our roads.
ii. Solar Power Generating Systems and Wind Turbines
In terms of order of the Hon’ble High Court of Delhi, GST Council directed that the issue related to valuation of goods and services in a solar power generating system and wind turbine be placed before next Fitment Committee. The recommendations of the Fitment Committee would be placed before the next GST Council meeting.
iii. Lottery
(i) Group of Ministers (GoM) on Lottery submitted report to the Council. After deliberations on the various issues on rate of lottery, the Council recommended that certain issues relating to taxation (rates and destination principle) would require legal opinion of Learned Attorney General.
5. For Simplifying GST returns Council has decided and proposed following.
1. In order to give ample opportunity to taxpayers as well as the system to adapt, the new return system to be introduced in a phased manner, as described below:
i. Between July, 2019 to September, 2019, the new return system (FORM GST ANX-1&FORM GST ANX-2 only) to be available for trial for taxpayers. Taxpayers to continue to file FORM GSTR-1&FORM GSTR-3B as at present;
ii. From October, 2019 onwards, FORM GST ANX-1 to be made compulsory. Large taxpayers (having aggregate turnover of more than Rs. 5 crores in previous year) to file FORM GST ANX-1 on monthly basis whereas small taxpayers to file first FORM GST ANX-1 for the quarter October, 2019 to December, 2019 in January, 2020;
iii. For October and November, 2019, large taxpayers to continue to file FORM GSTR-3B on monthly basis and will file first FORM GST RET-01 for December, 2019 in January, 2020. It may be noted that invoices etc. can be uploaded in FORM GST ANX-1 on a continuous basis both by large and small taxpayers from October, 2019 onwards. FORM GST ANX-2 may be viewed simultaneously during this period but no action shall be allowed on such FORM GST ANX-2;
iv. From October, 2019, small taxpayers to stop filing FORM GSTR-3B and to start filing FORM GST PMT-08. They will file their first FORM GSTRET-01 for the quarter October, 2019 to December, 2019 in January, 2020;
v. From January, 2020 onwards, FORM GSTR-3B to be completely phased out
2. On account of difficulties being faced by taxpayers in furnishing the annual returns in FORM GSTR-9, FORM GSTR-9A and reconciliation statement in FORM GSTR-9C, the due date for furnishing these returns/reconciliation statements to be extended till 31.08.2019
3. To provide sufficient time to the trade and industry to furnish the declaration in FORM GST ITC-04, relating to job work, the due date for furnishing the said form for the period July, 2017 to June, 2019 to be extended till 31.08.2019
4. Certain amendments to be carried out in the GST laws to implement the decisions of the GST Council taken in earlier meetings
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