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 ..
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
From India, Bengaluru
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