GST News: GST exemptions on some items set to be removed
The date of implementation of these recommendations has not been decided, people familiar with the deliberations said. These items are currently exempt from GST. The council also accepted the recommendations of another ministerial panel on stricter scrutiny and verification of high-risk taxpayers. These decisions were taken on the first day of the two-day GST Council meeting being held in Chandigarh.
GoM Term may be Extended
The council, which will continue its deliberations on Wednesday, is expected to discuss the implementation of these recommendations of the two groups of ministers (GoMs), one on the rates and the other on GST system reforms. The council is also likely to extend the term of the GoM on rates by another six months to finalise its report on rejigging slabs.
The GoM has recommended that GST exemption can continue on some items of daily use such as bread as also hearing aids, educational institutions, incense sticks, utensils, tractors, and agri-related machinery. It suggested phasing out tax exemption on services provided by the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (Sebi). It also recommended withdrawing GST exemption available for cheques – loose or in book form – and favoured a GST rate of 18%.
The council is also learnt to have accepted recommendations of the GoM on GST system reforms headed by Maharashtra finance minister Ajit Pawar that has suggested stricter scrutiny and verification of high-risk taxpayers and mandatory presentation of electricity bills at the time of registration.
The GoM also suggested public disclosure of information about unregistered bogus traders and certification of taxpayers’ bank accounts by the National Payments Corporation of India (NPCI).
The GST Council also discussed extending the term of the National Anti-Profiteering Authority (NAA) beyond November this year. It also favoured that the solicitor general assist in cases where the constitutional validity of NAA was challenged, one of the persons said.
The council has agreed to a detailed review of the mandate of the NAA for further strengthening. People aware of discussions said most of the states agreed that the role of the NAA is crucial and its tenure needs to be extended.
The council also discussed the demand by multiple states to extend compensation beyond June 30. The Centre had promised to compensate states for any revenue loss on account of shifting to GST for five years-that ends June 30. Another person said there was no consensus over extending compensation further and the discussion is likely to continue on Wednesday.
The council has allowed states to issue e-way bills for intra-state movement of gold and precious stones, the person said.
The GST Council is also learnt to have referred the matter of setting up GST tribunals to the GoM and has asked it to draw up a report on a detailed structure for them.