E-Paper
Mobile phones to late fee waiver, here are 5 big GST Council decisions
The GST Council meeting started with a presentation by Nandan Nilekani who was asked to explain the technical glitches with the GSTN system which has not been able to bear the load of more than a lakh end users.
The central government announced key decisions taken by the 39th GST Council meet on Saturday including a six per cent hike in GST for mobile phones. The meeting was held in the backdrop of reduced collections and continued difficulties encountered by users while accessing the GSTN system.
Here are the top 5 takeaways from the GST council meeting
1. Better GSTN system to be ensured by Infosys by July 2020
The meeting started with a presentation by Nandan Nilekani who was asked to explain the technical glitches with the GSTN system which has not been able to bear the load of more than a lakh end users.
Nilekani explained the problem and proposed a timeline for solving the issue. The Council has approved his request for better hardware and skilled manpower among other requirements for capacity enhancement.
Council has decided to request Infosys to advance the implementation of a leaner, meaner and efficient system to July 2020 from the proposed date of January 2021.
2. GST on Mobile hiked to correct the problem of Inversion
The GST Council decided to hike the GST rates on mobile phones and specified parts which presently attract 12% to 18% in an attempt to correct the issue of inversion leading to higher GST on inputs than the final product resulting in greater GST refunds compared to collections.
Sitharaman said the GST Council decided to defer the discussion and decision on all other items where inversion related complications need to be addressed to a future meeting.
3. Waiver of penalty for delayed filing of returns for FY18, FY19
The Finance minister said the GST Council decided to waive off late fees for filing of returns by entities with turnover of less than Rs 2 crore. She also announced that the due date for filing the annual return and the reconciliation statement for the financial year 2018-19 will be extended till 30th June 2020. She added that the delayed GST payment will attract an interest on the net tax liability from July 1.
4. GST on handmade, machine-made matchsticks rationalised to 12%
The GST Council decided to rationalise the taxes on matches to 12% to address complications arising from the existing 5% GST on hand made matches and 18% GST on machine-made matches. Sitharaman said this was a big issue for Tamil Nadu and Puducherry.
5. GST on MRO services of aircraft slashed to 5% from 18%:
It was decided to reduce the GST rate on Maintenance Repair and Overhaul services with respect to aircraft from 18% to 5% with full ITC and to change the place of supply for B-B (business to business) MRO services to the location of the recipient. This change is likely to assist in setting up of MRO services in India, said Sitharaman.
