Beware: Businesses avoiding GST, council deliberating crackdown

By | June 21, 2019

Finance Minister Nirmala Sitharaman is all set to chair her first meeting of the GST council on Friday. The newly appointed finance minister will preside over a gamut of issues including the issue of businesses avoiding GST, which has become evident in the wake of declining GST collections.

Agenda: Checking GST evasion

The council at its 35th meeting under the new FM will hold deliberations on ways to increase vigilance and to accord appropriate punishment for defaulters. The same discussions will be held on extending the tenure of the national anti-profiteering authority (NAA) by a year till November 2020.

The authority which came into existence on November 30, 2017, after its Chairman B N Sharma assumed charge still continues to receive consumer complaints of profiteering against companies. So far, the NAA has passed 67 orders in various cases. Along with NAA extension, a proposal of integrating e-way bill with NHAI’s FASTag mechanism from April 1, 2020 will also be put forth.

Such integration would help find the location of the vehicle and when and how many times it has crossed NHAI’s toll plazas and restrict transporters from doing multiple trips by generating a single e-way bill.

Transporters of goods worth over Rs 50,000 would be required to present an e-way bill during transit to a GST inspector, if asked.

Reports suggest that lack of harmonisation under the ‘track and trace’ mechanism in terms of sharing information among different agencies is leading to misuse of e-way bill.

Agenda: Single point refund system

The council will also discuss setting up a single point refund system and a mechanism for businesses to issue e-invoices.

Agenda: Draft Amendment Bill (GST)

The council is also likely to look at and approve a draft amendment bill to bring changes in GST law to allow businesses to rectify mistakes during payment of GST and applicability of interest only on cash component in case of delayed payment of GST. Discussion on mechanism for single point sanctioning and processing GST refunds will also take place in the meeting.

Agenda: GST on lottery

The council will also consider tweaking GST rate on lottery. An 8-member group of state finance ministers could not reach a consensus on whether a uniform tax rate should be imposed on lotteries or the current differential tax rate system should be continued.

Currently, a state-organised lottery attracts 12 per cent GST, while a state-authorised lottery attracts 28 per cent tax.

Agenda: Single-point processing of GST refunds

A mechanism for single-point sanctioning and processing GST refunds will be discussed, the current mechanism entails twin refund sanctioning authority of the central and state tax officers but that could well change by August when the proposed new structure involving a single authority comes in place.

Agenda: To give electric vehicle manufacturing a push

To give a push to manufacturing electric vehicles, the council will consider slashing GST rates to 5 per cent from 12 per cent.GST rate for petrol and diesel cars and hybrid vehicles is already at the highest bracket of 28 per cent plus cess.

The half-day meeting will begin at 2 pm after the pre-budget meeting presided by the FM in New Delhi.