GST Council mulls over making return filing simpler, discussion on petroleum pending

 The all-powerful GST Council today veered around the idea of making the GST return filing process simpler to ease compliance burden for small businesses.

The panel, headed by Finance Minister Arun Jaitley and comprising representatives of all states, at its 25th meeting today decided to reduce tax rate on 29 items and 54 categories of services with effect from January 25.
Briefing reporters after the meeting, Jaitley said the next meeting of the Council may consider bringing items like crude oil, natural gas, petrol, diesel, ATF and real estate within the GST purview.

In a bid to ease compliance burden, the Council veered around to the idea of registered entities continuing to file the return in GSTR 3B Form while moving to a system where supplier invoice captures details of the transaction.
The new process would be finalised in the next meeting of the GST Council after a written formulation is circulated to the states, he said. The date of the next meeting of the Council has not yet been decided, he said.
Jaitley said the GST provision requiring transporters to carry an electronic waybill or e-way bill, when moving goods of over Rs 50,000 in value between states, will be implemented from February 1 to check rampant tax evasion.
As many as 15 states have decided to implement the provision for intra-state movements as well, he said.

After implementation of the Goods and Services Tax (GST) from July 1, the requirement of carrying e-way bill was postponed pending IT network readiness. Once the e-way bill system is implemented, tax avoidance will become extremely difficult as the government will have details of all goods above the value of Rs 50,000 moved and can spot the mismatch if either the supplier or the purchaser does not file tax returns. 

Major recommendations of GST Council:

To exempt supply of services by way of providing information under RTI Act, 2005 from GST.

 To exempt legal services provided to Government, Local Authority, Governmental Authority and Government Entity.

 To reduce GST rate on the construction of metro and monorail projects (construction, erection, commissioning or installation of original works) from 18 percent to 12 percent.

To levy GST on the small housekeeping service providers, notified under section 9 (5) of GST Act, who provide housekeeping service through ECO, at five percent without ITC.

 To reduce GST rate on services by way of admission to theme parks, water parks, joy rides, merry-go-rounds, go-carting and ballet, from 28 percent to 18 percent.

To reduce GST rate on transportation of petroleum crude and petroleum products (MS, HSD, ATF) from 18 percent to five percent without ITC and 12 percent with ITC.

To exempt dollar-denominated services provided by financial intermediaries located in IFSC SEZ, which have been deemed to be outside India under the various regulations by RBI, IRDAI, SEBI or any financial regulatory authority, to a person outside India.

To exempt services by way of fumigation in a warehouse of agricultural produce.

To reduce GST to 12 percent in respect of mining or exploration services of petroleum crude and natural gas and for drilling services in respect of the said goods.

The Council also recommended rationalisation of certain exemption entries. These included:

To provide in CGST rules that value of exempt supply under sub-section (2) of section 17, shall not include the value of deposits, loans or advances on which interest or discount is earned.

However, this will not apply to a banking company and a financial institution including a non-banking financial company engaged in providing services by way of extending deposits, loans or advances. To tax renting of immovable property by the government or local authority to a registered person under reverse charge while renting of immovable property by the government or local authority to an un-registered person shall continue under forward charge.
- To add, in the GST rate schedule for goods at 28 percent, actionable claim in the form of a chance to win in betting and gambling including horse racing.

The Council also made certain clarifications regarding the above. These included:

 Services provided by senior doctors/consultants/technicians hired by the hospitals, whether employees or not, are healthcare services which is exempt. 

Hospitals also provide healthcare services. The entire amount charged by them from the patients including the retention money and the fee/payments made to the doctors etc., is towards the healthcare services provided by the hospitals to the patients and is exempt.

Food supplied to the in-patients as advised by the doctor/nutritionists is a part of a composite supply of healthcare and not separately taxable. Other supplies of food by a hospital to patients (not admitted) or their attendants or visitors is taxable.