Key outcomes of 26th GST Council meeting - Continuation of GSTR-3B, tax exemptions for exporters; applicability of E-way bill
The all-powerful GST Council meeting headed by the Hon'ble Finance Minister, Mr. Arun Jaitley held for the 26th time with an agenda inter-alia,to take up issues pertaining to simplification of return filing under GST, implementation of E-way bill, disbursal of refund to exporters & defer Reverse Charge Mechanism. With the conclusion of the 26th GST Council meet on March 10, 2018, the gist of the key takeaways from the meeting are as under:
Return filing System
There has been no conclusive decision on the simplification of the return filing process even after deliberating over the new model. Finance minister Arun Jaitley has said that there is a need to make sure that no evasion of tax is taking place in the new system. Hence the Group of ministers on IT have been tasked to finalise it. Till the new return filing system is in place, current system of filing GSTR 3B and GSTR-1 will be applicable for the another 3 months i.e. April to June, 2018.
Reverse charge mechanism
The liability to pay tax on reverse charge has been further postponed by three months i.e. till 30.06.2018. In the meanwhile, a Group of Ministers will look into the modalities of its implementation to ensure that no inconvenience is caused to the trade and industry.
The TDS/TCS mechanism has also been postponed till 30.06.2018. In the meantime, the modalities of linking State and Central Governments accounting system with GSTN will be worked out so that seamless credit is available to the registered traders whose tax is deducted or collected at source.
Grievance Redressal Mechanism
GST implementation Committee (GIC) has been tasked with the work of redressing the grievances caused to the taxpayers arising out of IT glitches.
Extension of Tax Exemption for Exporters for 6 months
Extension of the continuation of the exemptions under the export promotion schemes will be continued on the imports of the exporters till 1 October 2018, and it is expected that in such time e-wallet scheme is expected to be in place to continue the benefit in the future.
The Council directed GSTN to swiftly forward the balance refund claims to the Customs/Central GST/State GST authorities, as the case may be, for their immediate sanction and disbursement.
An interim solution was found by re-introducing the pre-GST tax exemptions on such imports. Additionally, for merchant exporters a special scheme of payment of GST @ 0.1% on their procured goods was introduced. Also, domestic procurement made under Advance Authorization, EPCG and EOU schemes were recognized as 'deemed exports' with flexibility for either the suppliers or the exporters being able to claim a refund of GST / IGST paid thereon. The scheme was made available upto March 31 2018.
The permanent solution agreed to by the Council was to introduce an e-Wallet scheme w.e.f. April 01, 2018. The e-Wallet scheme is basically the creation of electronic e-Wallets, which would be credited with notional or virtual currency by the DGFT. This notional / virtual currency would be used by the exporters to make the payment of GST / IGST on the goods imported / procured by them, so their funds are not blocked.
E-way bill shall be introduced for all Inter-State movement of goods, consignment value exceeding Rupees fifty thousand, across the country from April 01, 2018. For intra-State movement of goods, e-way bill system will be introduced w.e.f. a date to be announced in a phased manner but not later than June 01, 2018.
Recommendations regarding Data Analytics
GST Council has been apprised of the fact that CBEC and GSTN have started detailed data analytics across a number of data sets available with them. The outcome of preliminary data analysis has revealed the variances between:
- amount of IGST & Compensation Cess paid by importers at Customs ports and input tax credit of the same claimed in GSTR-3B; and
- amount of self-declared liability in FORM GSTR-1 and FORM GSTR-3B
It was deliberated that this information may be further analysed, and adequate action may be initiated accordingly.