GST Rates Changed For 40 Items, Deadline For GSTR 1 Filing Extended To October

GST Rates Changed For 40 Items, Deadline For GSTR 1 Filing Extended To October

The Goods and Services Tax Council on Saturday raised the cess on motor vehicles–mid-size cars, large cars and sports utility vehicles by 2%, 5% and 7% respectively instead of whole 10% increase effected in the law, while keeping the overall tax incidence within 50%.

This increase in cess rate would take the overall tax incidence on mid size cars to 45%, large cars to 48% and SUVs to 50% from 43%( 28% GST+ 15% cess) now.

Industry had pitched for differential hike –lower increase for mid-sized cars arguing that this price increase in this segment would impact middle class.The GST Council had at its last meeting approved a proposal for an amendment in the compensation law to raise the cess to 25% from 15%. The industry, which had cut prices in the high-end segment after GST roll out, opposed an across the board increase in cess. There is no change in cess rate for hybrid vehicles, 13 seaters and small cars.

GST rates slashed for over 40 items
The council cut GST rate for Walnuts, broom, clay idols custard powder, idly-dosa batter, rubber bands, raincoat, dhoop batti, saree fall, corduroy fabric, computer monitors, table and kitchenware, prayer beads. Khadi sold at KVIC outlets and clay idols have been exempted from the levy of GST, which replaced 40 state and central taxes and cesses.

Return filing date extended
The Council gave a breather to the industry struggling to meet the return filing deadline as the GSTN portal face hiccups due to heavy load.The GSTR1, which was to be filed by September 10, can be filed till October 10 by smaller businesses and large ones by October 3.

Also for easier compliance, the Council has allowed businesses to file Simplified GSTR-3B for four more months till December.

Revenue Secretary Hasmukh Adhia said Companies with turnover of over Rs 100 crore the last date for filing GSTR1 will be October 3 and for the rest it will be October 10. Filing of GSTR-2 for July will have to be done by October 31, and GSTR-3 by November 10. ” For GSTR-1,2,3 we are giving a long rope and we are staggering the return filing date for July,” Adhia said.

Date of GSTR 1, 2, 3 return filing for month of August will be communicated later, he said.

Adhia said the Tran1 form will be allowed to be amended.

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Till Friday over 45 lakhs GSTR-3B, 17 lakhs GSTR-1 and over 13 crore invoices have been filed on GSTN portal. Earlier this week, The date of final return filing for GSTR-1 was first extended to September 10 in view of rush in invoice uploading instead of September 5 earlier. Purchase returns or GSTR-2 was required to be filed by September 25 instead of September 10 earlier. GSTR-3 which is the match of GSTR-1 and GSTR-2 was needed to be filed by September 30, in place of September 15.

Ministerial group to look at GSTN
The Council also decided to set up an group of ministers to review the functioning of GSTN. “The council has decided to set up a committee of ministers for interaction with the GSTN for smooth transition,” finance minister Arun Jaitley said. Its composition will be given later, he said.

Revenues on track
The minister, who is the chairman of the council, said the council reviewed implementation of the new tax regime and held a detailed presentation on on migration of tax payers from the old regime to new regime. It also reviewed the revenue collections.
“overall revenue collections have been robust with more than 70% of taxpayers having filed their returns,” the minister said adding that there is large unutilised tax credit.

New framework for branded packaged foods
The issue of avoidance of 5% GST on pulses, cereals and flours, put up in unit container and bearing a registered brand name, was also discussed by the GST Council. Any brand registered on May 15, 2017 irrespective of whether it is de-registered later will face 5% tax.A mark or name in respect of which an actionable claim is available shall also be deemed to be a registered brand name and face 5% GST, a provision that could bring in-house brands of large retailers in the 5% tax bracket.

Relief for handicraft makers
Handicraft traders who sell to other states will not have to register if their turnover is below Rs 20 lakh.

Jaitley said GST on about 30 items have been lowered after anomalies in the fixation of rates were pointed out.

To deal with businesses which are deregistering brands post GST to avoid taxes, the panel decided May 15, 2017 as the cut-off date for considering as a registered brand for the purpose of GST levy, irrespective of whether or not the brand is subsequently deregistered.

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Unbranded food items are exempted from the GST, whereas branded and packaged food items attract 5 per cent rate. Hence, many businesses are deregistering their brands to avoid the levy.

The tax has been lowered on dried tamarind, custard power, oil cakes, dhoop batti, dhoop and other similar items, plastic raincoast, rubber bands, rice rubber rolls for paddy de-husking, computer monitors and kitchen gas lighters and brooms and brushes.

Also, the deadline for filing of sales return or GSTR-1 for the month of July, the first month of implementation of the new tax regime, has been extended by a month to October 10.

Deadlines for other three returns to be filed under the GST regime have also been extended.

Jaitley said overall GST collections have been robust with over 70 per cent of eligible taxpayers filing returns of about Rs 95,000 crore.

The meeting, the second since the implementation of GST, reviewed the functioning of GST Network — the IT backbone and portal for registration and tax returns under the GST regime.

GSTN on “two-three occasions got overloaded. These are transient challenges and glitches in technology. The council has decided to appoint a committee to interact with GSTN for smooth transition”, the finance minister said.

Since the work is huge, the period of filing of returns has been extended, he said.

Jaitley further said that food stuff sold in open was categorised at zero per cent tax rate while the branded ones attracted 5 per cent.

Some businesses were deregistering their brands and selling under corporate brand name, creating inequality of trade, “so we amended the rule”, he said.

“If you fall in either of two categories, you will pay 5 per cent tax — one, if on May 15, 2017, you had a registered trade mark you have to pay 5 per cent GST. Two, if you have a mark or a name on which you are entitled to maintain actionable claim or exclusivity, then you have to pay 5 per cent,” Jaitley added.

Khadi fabric sold through KVIC stores would be exempted, he said adding inter-state sales where turnover is less than Rs 20 lakh as also for artisans will not need registration.

Similar dispensation for certain categories of job work, excluding gold, has also been approved.

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At its last meeting on August 5, the panel had approved hike in cess on mid, large size cars, SUVs, hybrid and luxury ones to up to 25 per cent, from 15 per cent. Subsequently, an Ordinance promulgated and the council today looked into the quantum of hike.

Car prices had dropped by up to Rs 3 lakh as the tax rates fixed under the GST that came into effect from July 1, was lower than the combined central and state taxes in the pre-GST days.

To fix this anomaly, the council raised the cess.

Revenue Secretary Hasmukh Adhia said the council has decided that GSTR-3B will be filed for four more months till December.

“For GSTR-1, 2, 3, we are giving a long rope and we are staggering the return filing date for July,” he said.

“(For) companies with turnover of over Rs 100 crore, the last date for filing GSTR-1 will be October 3. For the rest, it will be October 10,” he said.

GSTR-2 for July will have to be filed by October 31 and GSTR-3 by November 10.

Date of GSTR 1, 2, 3 return filing for month of August will be informed later.

Jaitley said businesses can opt for Composition Scheme till September 30 and the council has also allowed businesses to make rectification in transition form TRAN-1 once.

Under the GST, which replaced over a dozen central and state levies in the biggest tax reform since independence, cars attract the top tax rate of 28 per cent.

On top of this, a cess of 1 to 15 per cent has been levied for the creation of a corpus to compensate states for any loss of revenue from implementation of GST. Read more

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