Key Statistics and Performance of Goods and Service Tax

Key Statistics and Performance of Goods and Service Tax for Calendar Year 2019

On 1st January, 2020, India’s GST Laws has completed its 30 months or 900 days of Implementation.

While GST has been a breakthrough step by the present government paving way for various accolades world-wide in the form of Improvement in Ease of Doing Business Index, Transparency in systems and collections, Increase in Revenue thereby more allocation for social welfare schemes etc.,. However, at the same time, It had its own share of cons like reduction in domestic industrial output, fall in employment and exports not only during the transitional period but till now.

Some Statistics for the year 2019 as follows:

GST Performance in terms of Revenue

As far as gross GST collections concerned, for 2019, it can be termed as a ‘Mixed Bag’. Out of 12 months of the 2019, It has been a neutral performance as half the months has exceeded the targets of Rs. 1 L and other half almost touching the target with September recording a huge difference.

Revenue Augmentation Measures:

Various Revenue Augmentation Measures Include:

1. Exchange of information such as high input tax credit availed but details not matching with their income tax returns, turnovers and other financial transactions between the two Boards to nab the tax evaders.

2. In appropriate cases, suitable instructions to tax payers to file revised Returns, if he has missed out any such correct tax information.

3. GST officials to make sure if the GSTR-1 and GSTR-3B are being promptly filed by the taxpayers.

4. Strict actions including blocking of e-way bill generation, availment of input tax credits, cancellation of registration, if failed to comply.

5. Likely field visits, special drive, campaigns to recover past arrears during the next three months.

GST Council Meetings and Recommendations:

While framing the Constitutional Amendment Bill, an independent constitutional body named as GST Council (GSTC) consisting of Union Finance Minister as its Chairman and Finance or Tax heads of the 28 States and 09 Union Territories as its Members has been provided suitably.

Tha Articles of the Constitution empowered the GST Council to make critical recommendations with regard to provisions and amendments to GST law.(Example: Rate changes, Levy of Cess and other Augmentation measures)

For the Current Calendar year 19-20, 32^nd to 38^th GST council meetings were conducted and following were the meeting wise recommendations which were subsequently made as law:

32^nd GST Council Meeting (Conducted on 10^th January 2019):

1. Basic exemption limit for suppliers of goods will be increased from Rs 20 lakhs to Rs 40 lakhs. However, this limit remains Rs 20 lakhs for suppliers of services. For the special category States, the limit for registration is currently at Rs 10 lakhs. This limit in case of supply of goods is increased up to Rs 20 lakhs.

2. Those suppliers rendering either independent services or providing a mixed supply of goods & services with a turnover of up to Rs 50 lakhs p.a in the preceding financial year, can join this scheme. The Tax rate is fixed at 6% (3% CGST +3% SGST).

3. Increase in the limit to opt into the scheme will be increased up to Rs 1.5 crore effective from 1st April 2019. Tax to be paid Quarterly and GST Returns to be filed annually.

4. Kerala has been given an approval to charge Disaster/calamity cess of up to 1% on all the intra-state supplies of goods and services within Kerala, for up to two years.

5. Free Accounting and Billing Software shall be provided to Small Taxpayers by GSTN.

33^rd GST Council Meeting (Conducted on 24^th February 2019)

1. GST Rate for affordable housing slashed to 1% without the benefit of the Input tax credit (ITC) as against the earlier rate of 8%. However, the earlier proposal had pointed out that the rate will be slashed down to 3% without the ITC benefit.

2. Affordable Housing has been redefined under the GST law with a twin definition to it as follows:

• In case of Metro cities: Flats with a value of up to Rs.45 lakhs with the carpet area of up to 60 sq.m.Metro cities currently cover Bengaluru, Chennai, Delhi NCR (limited to Delhi, Noida, Greater Noida, Ghaziabad, Gurgaon, Faridabad), Hyderabad, Kolkata and Mumbai (the whole of MMR)
• In case of Non-metro cities: Flats with a value up to Rs.45 lakhs with the carpet area of up to 90 sq.m.

3. GST rate for non-affordable housing reduced to 5% without ITC from the existing rate of 12%.

4. GST exemption proposed on Transfer Development Rights (TDR)/ Joint Development Agreement(JDA), long term lease (premium), FSI- Press release states that an Intermediate tax on development rights such as the above mentioned will be exempt from GST for such residential properties on which GST is payable.

34^th GST Council Meeting (19^th March 2019)

1. GST Council has approved the transition plan for the implementation of the new tax structure for housing units.

2. GST rates for new projects will be mandatory from April 1.

3. Builders of existing housing projects that are completing construction by 31st March 2019 get to choose either of the two alternatives:

• Alternative 1: Choose the old rate of 12% (8% for affordable housing) and charge this GST Rate in the invoices raised. Further, input tax credit benefit is available and can be passed on to the buyer.

• Alternative 2: Choose to bear GST tax at the rate of 5% (1% for affordable housing as defined by GST law). The benefit of the input tax credit(ITC) is not available to the builder for procurements used in construction.

4. Those who choose the 2nd alternative must reverse the accumulated ITC on their closing stock of under-construction properties in a proportion laid down in rules (to be notified) within six months.

5. The new rate of 5% (1% for affordable housing) will apply to those residential properties whose construction is going on even after 31st March 2019 or any new projects launched after 1st April 2019. Here, the benefit of ITC on procurements will not be available to the builders.

6. 80% procurement of materials should be from the registered dealer.

7. Up to 15% of commercial space to be treated as residential property for GST purpose.

35^th GST Council Meeting (Conducted on 21^st June 2019)

1. The due date for filing GSTR-9, GSTR-9A, and GSTR-9C for the FY 2017-18 has been extended by two months, till 31 August 2019. Official notification can be made anytime soon.

2. Aadhaar-enabled GST Registration introduced:

3. Tenure of National Anti-profiteering Authority extended by two years

3. 10% penalty to apply for any delay in depositing profiteered amount more than 30 days.

4. E-invoicing to start from January 2020

5. E-ticketing made mandatory for multiplexes

6. Rate cut decision on electric vehicles, chargers & leasing thereof deferred; Fitment Committee to submit its report

7. Rate cut for lottery put on hold; Matter to be referred before an Attorney General

8. GSTAT to be GST Appellate Tribunal.

9. For non-filing of GST returns, E-way bills to be blocked

36^th GST Council Meeting (Conducted on 27^th July 2019)

1. The GST rate on all electric vehicles be reduced from 12% to 5%.

2. The GST rate on charger or charging stations for Electric vehicles be reduced from 18% to 5%.

3. Hiring of electric buses (of carrying capacity of more than 12 passengers) by local authorities be exempted from GST.

4. These changes shall become effective from 1st August, 2019.

5. Last date for filing of intimation, in FORM GST CMP-02, for availing the option of payment of tax under notification No. 2/2019-Central Tax (Rate) dated 07.03.2019 (by exclusive supplier of services), to be extended from 31.07.2019 to 30.09.2019.

6. The last date for furnishing statement containing the details of the self-assessed tax in FORM GST CMP-08 for the quarter April, 2019 to June, 2019 (by taxpayers under composition scheme), to be extended from 31.07.2019 to 31.08.2019.

37^th GST Council Meeting (Conducted on 20^th September 2019):

1. Waiver of GSTR-9A for Composition Taxpayers for FY 2017-18 & FY 2018-19

2. GSTR-9 for small taxpayers (Turnover of upto Rs. 2 crores) now not compulsory for FY 2017-18 & FY 2018-19

3. New GST Returns Deferred to April 2020

4. Restrictions on ITC claim in GSTR-3B

• To push the timely filing of a statement of outward supplies by taxpayers, the GST Council recommended restrictions on Input Tax Credit (ITC) claim. ITC will be restricted for the recipients if the suppliers have not furnished the details of outward supplies.

5. CBIC released Central Tax Circular number 105, dated 28 June 2019. Through the circular, they have clarified post-sale discount for promotional activities by the dealer, secondary discounts, and reversal of ITC on post-sale discount. The circular clarifies that whether the post-sale discount has to be included in the value of supply or not and whether ITC is to be reversed at the time of issuing a credit note or not in certain specified cases.

6. GST Exemptions

• Supplies of goods or services to FIFA- specified individuals for the Under-17 Women’s Football World Cup in India.
• Supply to the Food and Agriculture Organisation (FAO) for specified projects in India.
• Imports of certain defence goods not made indigenously (up to 2024).
• Import of silver/platinum by specified agencies (Diamond India Ltd), and the supply of silver/platinum by specified nominated agencies to exporters for the export of jewellery.
• Storage or warehousing services for cereals, pulses, fruits, nuts and vegetables, spices, copra, sugarcane, jaggery, raw vegetable fibres such as cotton, flax, jute etc., indigo, unmanufactured tobacco, betel leaves, tendu leaves, rice, coffee and tea.
• Life insurance business provided or agreed to be provided by the Central Armed Paramilitary Forces (under Ministry of Home Affairs) Group Insurance Funds to their members.
• Services provided by an intermediary to a supplier of goods or recipient of goods when both the supplier and recipient are located outside the taxable territory.
• The BANGLA SHASYA BIMA (BSB) crop insurance scheme of the West Bengal Government.

7. Other Significant Decisions

• The validity period of the conditional GST exemption extended for export freight by air or sea by one more year till 30 September 2020.
• Taxability of fishmeal: Exemption granted for all cases from 1 July 2017 to 30 September 2019, except where tax is already collected.
• Pulleys, wheels and items under HSN 8483 used as agricultural machinery to be taxed at 12% during period 1 July 2017 to 31 December 2018.
• Option to pay GST at the rate of 18% on transaction value at the time of disposal of specified goods for petroleum operations (on which concessional GST rate of 5% was paid at the time of original supply) provided that the goods are certified by Director General Hydrocarbon (DGH) as non-serviceable.
• To specify modalities for allowing concessions on spare parts imported temporarily by foreign airlines for the repair of their aircraft, while in India in transit in terms of the Chicago Convention on Civil Aviation.

38^th GST Council Meeting (Conducted on 18^th December 2019):

1. Due dates extended for GSTR-9 and GSTR-9C for FY 2017-18 till 31 January 2020

2. Provisional ITC claim in GSTR-3B further restricted to 10% from the earlier 20%, where invoices or debit notes are not reflected in GSTR-2A.

3. Late fee waiver on GSTR-1 through amnesty scheme for tax periods July 17 and Nov 19, if filed by 10^th January 2020.

4. Standard Operating Procedure (SOP) in case of non filing of GSTR-3B defined for taxman.

5. The due date extension for GST returns for some North Eastern States (November 2019) to be extended till 31 Dec 2019.

6. The GST Council decided to levy 28% tax on all lotteries

• Opts for voting to conclude the matter
• Date of applicability is 1 March 2020
• Prior, GST rates on lottery schemes were as follows:

i. State-owned – 12%

ii. State-authorised – 28%

7. GST Rate rationalised to remove inverted tax structure. The GST Council imposes a uniform rate of 18% from earlier 12% on bags belonging to HSN code 3923/6305 from 1 January 2020 (woven and non-woven bags and sacks of polythene or polypropylene strips or the like , whether or not laminated, of a kind used for packing of goods including FIBC).

8. Supply should be a long-term lease of an industrial or financial infrastructure plots. The Central or State Government holds 20% or more shares in the developer’s capital from the earlier share of atleast 50%. Exemption to apply from 1 January 2020.

9. Amendments to the GST law to be taken up in the Union Budget 2020-21. Grievance Redressal Committees (GRC) will be constituted at Zonal/State level to address grievances of specific/ general nature of taxpayers.

GST Compensation Cess

1. In recent times, many states were complaining about Central Government’s failure to honour its promise of compensation cess.

2. States dues were about Rs. 50,000 crore as of 1ST December, 2019. While implementing GST, the Central Government has guaranteed 14 per cent revenue growth during first five years and also agreed to compensate any such shortfall by levying compensation cess on such sin and luxury goods. Currently, the GST (Compensation to States) Act, 2017 levies the said cess at varied rates from 5 per cent to 22 per cent on five products considered as sin or luxury goods such as tobacco, pan masala, aerated drinks, coal and motor vehicles or auto mobiles. Compensation cess.

References: www.cleartax.com, www.taxman.com, www.gst.gov.in, www.pib.nic.in