The Goods and Services Tax (GST) Council is set to hold its 27th meeting on Friday to decide on the proposals to simplify the return-filing process and consider imposing cess on sugar to help sugarcane farmers.

Finance Minister Arun Jaitley will chair the meeting through video conferencing.

Though the meeting has limited agenda, many industry lobbies are doing their best to impress upon the Council to consider rate cuts, especially for cement, home appliances and multiplex tickets. The Council, however, is unlikely to take up any rate revision proposal.

Return-filing process

The Council will take up the proposal for comprehensive return process as finalised by the Group of Ministers, headed by Deputy Chief Minister of Bihar Sushil Kumar Modi. The new process involves single return as against the present system of GSTR Forms 1-3. Though the registered assessees have to file only the GSTR Form 1 while the other two are auto-populated, there is still a misconception about filing 39 returns annually.

This is one of the reasons why the government is pushing for single comprehensive return form with details of inward and outward supplies. This will reduce the number of returns, help in invoice matching and have all details in one place. It may be noted that the earlier invoice matching system was suspended temporarily and registered assessees were expected to file GSTR Form 3B. Now, this will be done away with after the introduction of the proposed comprehensive mechanism.

Last month, while briefing media about the new mechanism, Modi had said the new form would be a kind of fusion — with the option of providing provisional credit and input tax credit linked with tax payment. Accordingly, the new return mechanism is expected to provide input tax credit (ITC) to buyer once the invoice uploaded by the supplier is verified by him/her on the GSTN portal even if tax is not paid by the sellers.

Experts believe a simplified ITC claim process is the need of the hour to avoid waiting for confirmation, acceptance from the recipient or tedious tasks of uploading sales and purchase details to avail the credit. “The next meeting should focus on adopting a return model that does away with the need for the buyer to be responsible for the sellers’ tax payments. In addition, reverse charge on purchases from unregistered dealers could also be considered for reintroduction,” said MS Mani, Partner with Deloitte India.

Cess on Sugar

The Council is also expected to take up a proposal to impose a 5 per cent levy on sugar. This is expected to translate into an increase in retail price of up to ₹3 a kg. Money collected through cess will be used to provide financial support to the sugarcane farmers. The cane farmers are having a tough time as they are not getting sugarcane dues from mill owners, while mill owners say that final product price is so low in the market making things difficult for them.

Change in GSTN structure

The Council is also likely to take a call on converting Goods and Services Tax Network (GSTN) into a government-owned company from private company. At present, HDFC, HDFC Bank, ICICI Bank, NSE Strategic Investment Co and LIC Housing Finance Ltd together hold 51 per cent stake in GSTN while the remaining 49 per cent is with Central and State Governments. Under the new proposal, the Centre and States together will have at least 51 per cent equity.

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