



The GST Council, the apex decision-making body for the tax, approved a rejig in the rates of 29 goods and changes to the taxation regime for 53 services at its 25th meeting in the Capital on Thursday. The council is also veering toward a simpler compliance regime for businesses that will entail a single form or even just a supply invoice. It approved a definition for handicrafts and the designation of 40 items as handicrafts.



“One key issue before the council was simplification of the return process,” union finance minister and council chairman Arun Jaitley said. “Initially, there will be a GSTR3B and a supplier’s invoice… Today it was discussed but not approved but we are moving in that direction.”



The council felt that the ministerial group set up under Bihar deputy chief minister Sushil Modi for return simplification and Nandan Nilekani of Infosys, which has built the GST Network, can finalise the format of the return form. It can then be taken up over video conference and approved, Jaitley said. Modi, GSTN chairman Ajay Bhushan Pandey and Nilekani gave a detailed presentation to the council in this regard. Compliance has been a major pain point for the industry that has raised the issue of complexity, the number and frequency of returns as well as the functioning of the GST Network, which hasn’t been without its glitches.



The plan, which is still in the works, seeks to do away with three forms — GSTR1, GSTR2 and GSTR3 — and replace them with GSTR3B initially along with the uploading of a supply invoice. An official said this may be further simplified with just the supply invoice having to be uploaded and the filing of a return annually or whatever frequency is decided upon. Taxes can be deposited on the basis of the invoice and if there is any mismatch between the buyer and seller invoices, an explanation can be sought.



Here's the full list of revised GST rates on 29 goods and 53 services:

NEW DELHI: India announced a significant revamp of the goods and services tax (GST) framework, including cuts in the rates on 20-litre packaged drinking water, biodiesel, diamonds and precious stones, sugar candies, tailoring services, amusement parks and low-cost housing construction services. The total revenue loss on account of these cuts, which take effect on January 25, is pegged at Rs 1,000-1,200 crore.The GST Council, the apex decision-making body for the tax, approved a rejig in the rates of 29 goods and changes to the taxation regime for 53 services at its 25th meeting in the Capital on Thursday. The council is also veering toward a simpler compliance regime for businesses that will entail a single form or even just a supply invoice. It approved a definition for handicrafts and the designation of 40 items as handicrafts.“One key issue before the council was simplification of the return process,” union finance minister and council chairman Arun Jaitley said. “Initially, there will be a GSTR3B and a supplier’s invoice… Today it was discussed but not approved but we are moving in that direction.”The council felt that the ministerial group set up under Bihar deputy chief minister Sushil Modi for return simplification and Nandan Nilekani of Infosys, which has built the GST Network, can finalise the format of the return form. It can then be taken up over video conference and approved, Jaitley said. Modi, GSTN chairman Ajay Bhushan Pandey and Nilekani gave a detailed presentation to the council in this regard. Compliance has been a major pain point for the industry that has raised the issue of complexity, the number and frequency of returns as well as the functioning of the GST Network, which hasn’t been without its glitches.The plan, which is still in the works, seeks to do away with three forms — GSTR1, GSTR2 and GSTR3 — and replace them with GSTR3B initially along with the uploading of a supply invoice. An official said this may be further simplified with just the supply invoice having to be uploaded and the filing of a return annually or whatever frequency is decided upon. Taxes can be deposited on the basis of the invoice and if there is any mismatch between the buyer and seller invoices, an explanation can be sought.

Items Old tax rate New tax rate Second-hand medium and large cars and SUVs 28% 18% LPG supply for supply to household domestic consumers by private LPG distributors 18% 5% Bio-fuels powered buses 28% 18% Sugar boiled confectionery 18% 12% Drinking water packed in 20 litre bottles 18% 12% Drip Irrigation system 18% 12% Cigarette filter rods 12% 18% Tailoring service 18% 5% The admission to theme parks, water parks etc 28% 18%



The council gave in-principle approval to changes suggested to the GST law and rules, including an enabling provision for centralised registration and filing. “After final drafting and legislative clearance, they will be brought in as amendment,” a government official said.“Consensus on simplification of the return process by continuing with Form 3B and uploading of only supplier invoice details is good news for the industry,” said Harpreet Singh, partner, indirect tax, KPMG India. “It simply means lesser and easier compliances and resultant less compliance costs.”Pratik Jain, indirect tax leader, PwC, said, “While simplification and merging multiple monthly returns into a single return would be good in concept, it needs to be ensured that invoice level details are made available to the buyers on a real-time basis so that remedial action can be taken without waiting for assessment or audit.”Jaitley said the composition scheme was discussed by the council as total collections from 7 million dealers amounted to Rs 307 crore, implying that most have declared turnover below Rs 20 lakh. He said that one of the suggestions from the council to address evasion was reintroduction of the reverse-charge mechanism for composition dealers. “This could be considered when amendments to the central GST and state GST laws are taken up,” the minister said. The composition scheme is aimed at small businesses below a revenue threshold that can pay a flat rate and avoid GST documentation.The council had at its meeting in November raised the threshold for availing the composition scheme to Rs 1.5 crore.Jaitley said the council approved a new definition for handicrafts as recommended by a committee and the categorisation of 40 items under it.“These would now be examined by the fitment committee,” he said. Also, the committee on handicrafts will examine requests from states for inclusion of more items in the category. However, an official said the fitment committee may not suggest reduction in tax rates for all handicraft goods.“The principal concern is jobs in the handicraft sector,” Jaitley said.The council also reviewed the integrated GST collections of about Rs 35,000 crore with the Centre and it was decided that this can be provisionally divided between the Centre and the states.“This will ease the indirect tax collection of state and Centre. Direct tax collections have been good and we will meet the budgeted target,” Jaitley said.Asked about Hindustan Unilever’s offer to deposit Rs 119 crore with the anti-profiteering authority, he said this amount would be provisionally accepted. This follows the government seeking to ensure that companies are passing on the benefits of lower GST to consumers.On the Congress party’s demand for imposition of GST on petroleum products and inclusion of real estate within GST’s ambit, he said these issues would be discussed at the next meeting.Following the electronicway bill trial having started on January 15, this will be rolled out nationwide from February 1 for inter-state sales while 15 states will implement it for intra-state trade. “Trade and transport are expected to comply with the e-way bill,” he said.ET had reported on January 17 that businesses are worried about being prepared for the e-way bill rollout with some calling for a deferral.