Centre sets up two committees of state FMs to rework GST rate slabs

 







The finance ministry has set up two committees of state finance ministers which would rework rate slabs, review GST exempt items and identify potential evasion sources.

Four years after the rollout of the GST, which replaced the complex indirect tax structure, the Centre and states have started work on moving towards a “simpler rate structure” by reviewing the current rate slabs, including special rates and merger of rate slabs.

The Group of Ministers (GoM) on rate rationalisation would also review items under inverted duty structure to help minimise refund payout, and review the supply of goods and services exempt under GST with an objective to expand the tax base and eliminate breaking of input tax credit chain.

The seven-member panel, which would submit a report in two months, would be headed by Karnataka chief minister Basavaraj Bommai and include Bengal finance minister Amit Mitra, Kerala finance minister K.N. Balagopal and Bihar deputy chief minister Tarkishore Prasad.

Under GST, a four-rate structure that exempts or imposes a low rate of tax 5 per cent on essential items and top rate of 28 per cent on cars is levied. The other slabs of tax are 12 and 18 per cent. Besides, a cess is imposed on the highest slab of 28 per cent on luxury, demerit and sin goods.

There have been demands for merging the 12 and 18 per cent slab as also take out certain items from the exempt category to balance the impact of slab rationalisation on revenue.

With regard to inverted duty structure, the GST Council has already corrected the rate anomaly in case of mobile handset, footwear and textiles. The ministerial panel would now look at representations of inverted duty structure and recommend suitable rates to eliminate any such cases where final goods attract a lower GST than the tax levied on its inputs.

The GoM on GST system reforms would identify potential sources of evasion and suggest changes in business processes and IT systems to plug revenue leakage. The panel is headed by Maharashtra deputy chief minister Ajit Pawar.

The panel, which would give its recommendation to the council from time to time, would review IT tools and interface available with taxmen and suggest ways to make them more effective, identify possible use of data analysis towards better tax compliance and suggest ways of better co-ordination between central and state tax officers.

The decision to set up these two GoMs was taken by the GST Council, chaired by finance minister Nirmala Sitharaman, on September 17.


Download our App to get knowledge updates: https://play.google.com/store/apps/details?id=com.app.gstmitra

Join Our Telegram Channel for more updates:https://t.me/praveengst



















Advertisement

Comments

Post a Comment

Popular posts from this blog

Centre appeals against ruling on levy of GST on maintenance charges to resident welfare associations

Image
  The Centre has preferred a writ appeal before the Madras High Court against a single judge's order that flat or villa owners paying more than ₹7,500 a month towards maintenance charges to their residents’ welfare associations must pay Goods and Services Tax (GST) at the rate of 18% only for the amount exceeding ₹7,500 and not for the entire monthly contribution. Justices T.S. Sivagnanam and Sathi Kumar Sukumara Kurup on Wednesday allowed an application filed by the Centre to dispense with production of a certified copy of the judgment passed by Justice Anita Sumanth recently and directed the Registry to list the appeal for admission in the usual course. Justice Sumanth had in July this year quashed an order passed by the Authority for Advance Ruling (AAR) on June 21, 2019 as well as a consequent circular issued by the Department of Revenue under the Union Finance Ministry on July 22, 2019 since both of them had insisted upon collecting GST for entire monthly contribution. The jud...
Read more

Seven key things to know before filing income tax return (ITR) for FY21

Image
  The last date to file income tax return for the financial year 2020-21 has been extended to September 30, 2021. Although there is more than two months left for the deadline to end, it is always recommended to complete the task as soon as possible and not to wait for the last minute. Worth mentioning here is that the income tax department last month launched a new e-filing portal (www.incometax.gov.in) to speed up the processing of tax returns. The I-T department will soon launch a mobile application, having all the features of the new portal. This year taxpayers have to take care of the following changes in the ITR filing process. 1) A new utility named JSON has been launched for filing tax return forms for FY21. At present, only three forms, ITR 1, 2 and 4 have been released. These new forms will import pre-fill data such as personal details, salary income, dividend income, interest income, capital gains and all the information available in Form 26AS. 2) Taxpayers will have the ...
Read more

Income Tax Dept detects ₹350 cr unaccounted cash receipts after raid in Rajkot

Image
  The Income Tax Department carried out a search and seizure operation on a real estate group based in Gujarat's Rajkot and found unaccounted cash receipts in various projects of approximately ₹350 crore, the Finance Ministry said on Friday. The group is among Gujarat’s prominent real estate builders and developers and is actively engaged in real estate, construction and land trading businesses in and around Rajkot. More than 40 premises were covered in the search operation. During the course of operation, many incriminating documents and digital evidences were seized indicating involvement of the group in unaccounted transactions. The IT sleuths found substantial evidence of transactions outside the regular books of accounts, unaccounted cash expenses, cash advances received and interest paid in cash. Evidence of on-money payments in real estate projects-flats, shops and land deals has also been found. Total unaccounted cash receipts in various projects of approximately ₹350 crore...
Read more