The council is likely to discuss ways to curb tax evasion and may take some tough decisions.
The 35th meeting of GST Council will take place on June 21, the first under the new Finance Minister Nirmala Sitharaman. The GST Council in its meeting on Friday is expected to take some big decisions.
The council is likely to discuss ways to curb tax evasion and may take some tough decisions.
It is expected that the council will extend till November 30, 2020 the tenure of the National Anti-profiteering Authority (NAA), which deals with customer complaints regarding not receiving tax cut benefits.
Besides, the meeting is also expected to discuss an appellate tribunal for north-eastern states, and another one for all Union Territories.
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Earlier, the meeting was scheduled for June 20, but has now been postponed to June 21.
Here are other issues that are likely to be discussed by the GST Council:
1. Tax evasion high on agenda
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The Goods and Services Tax Council is set to take several decisions to curb tax evasion in its first meeting under Sitharaman.
According to a report in the Mint, the government plans to increase scrutiny on businesses amid lower-than-expected GST collections. The GST Council in its June 21 meeting will seek to introduce compliance requirements to curb tax leakage. Initially, big businesses are to be targeted and then steps will be taken to increase tax compliance among small merchants.
2. Compulsory generation of e-invoice
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The Council may consider issuance of e-invoice by entities with turnover of over Rs 50 crore for business-to-business (B2B) sales in a bid to curb GST evasion. Generation of e-invoices will improve transparency in transactions by the big businesses. While the proposal will initially target big business, smaller merchants will be brought under the ambit at later stages.
3. Extension to anti-profiteering authority
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The GST Council is likely to extend till November 30, 2020 the tenure of the National Anti-profiteering Authority (NAA), which deals with customer complaints regarding not receiving tax cut benefits, at its next meeting on June 21, an official said.
The Finance Ministry is of the view that NAA should be given an extension of one year till November 30, 2020 as the authority continues to receive complaints of profiteering by companies, the official told PTI.
The NAA is keen for a two-year extension, the official said, adding the final call will be taken by the GST Council in its meeting on June 21.
4. Appellate tribunal bench for north-eastern states
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The Council at its 35th meeting, the first under new Finance Minister Nirmala Sitharaman, is also likely to consider a proposal to set up one appellate tribunal for north-eastern states, and another one for all Union Territories.
The Council will take a call on setting up a combined bench for all north-eastern states as well as one bench to deal with appeal cases in six Union Territories -- Chandigarh, Puducherry, Lakshadweep, Daman and Diu, Dadra and Nagar Haveli, and Andaman and Nicobar Islands, the official said.
5. Appellate tribunal benches for Delhi, Odisha and Telangana
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Soon after the GST was rolled out from July 1, 2017, the government had approved setting up of the NAA for two years to deal with complaints by consumers against companies for not passing on GST rate cut benefits.
The NAA came into existence on November 30, 2017, after its Chairman BN Sharma assumed charge. So far, the NAA has passed 67 orders in various cases.
The GST law provides for setting up of benches of appellate tribunal in all states. Although 18 states have got the approval to set up appellate benches, none of these states have operationalised them.
The GST Council in its June 21 meeting is likely to approve the proposals of Delhi, Odisha and Telangana to set up appellate tribunal benches.
The Council will also take a call on setting up a combined bench for all north-eastern states as well as one bench to deal with appeal cases in six Union Territories -- Chandigarh, Puducherry, Lakshadweep, Daman and Diu, Dadra and Nagar Haveli, and Andaman and Nicobar Islands, the official said.
6. GST on extra-neutral alcohol (ENA)
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Besides, the Council would discuss a proposal to levy Goods and Services Tax (GST) on extra-neutral alcohol (ENA), which is used for manufacturing alcoholic liquor for human consumption, the official added.
ENA a is derivative of sugarcane molasses (95 per cent high-purity ethyl alcohol) and is not an alcoholic liquor for human consumption but can be used as raw material or input, after processing and substantial dilution, in the production of whisky, gin, country liquor etc.
7. States differ on bringing ENA under GST
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With regard to bringing ENA under GST, states have divergent views on levying GST. Larger states like West Bengal, Rajasthan, Haryana, Tamil Nadu, Karnataka, Andhra Pradesh and Maharashtra have been of the view that ENA should be out of GST.
States levy Value Added Tax (VAT) and Central Sales Tax (CST) on ENA and states will have to forgo the right to tax the product if it is brought under GST.
The GST Council had earlier sought the opinion of the Attorney General on legality of imposing GST on ENA. The AG had then opined that since ENA is not consumed directly by people, GST can be imposed on it.
Currently, potable alcohol is out of the ambit of GST and states are free to levy taxes on them.
