Mohan Lavi

GST amendments: A bid to iron out the issues

Mohan R Lavi | Updated on September 25, 2019 Published on September 25, 2019

While the GST Council did address some aspects that were causing pain, sector-specific measures were a given a miss

On September 20, taxpayers were looking forward to the outcome of the 37th meeting of the GST Council expecting some relief measures for the economy in general, as well as for certain sectors such as automobiles and textiles in particular. Long before the GST Council meeting commenced, the Finance Minister diverted attention by slashing income tax rates drastically. Eventually, the decisions taken at the GST Council meeting paled in comparison to the big-bang income tax announcement. No sector-specific reliefs were provided, nor was there any path-breaking announcement.

Composition dealers and those with a turnover of up to ₹2 crore should heave a sigh of relief, since the need to file the annual return in Form GSTR 9 has been removed. For the others, the government has stated that a Committee of Officers would be appointed to recommend simplification of the forms. This is bound to frustrate these taxpayers, since they have attempting to understand and file this form correctly for quite some time now with little success. Instead of investing further time in changing and amending forms in an attempt to simplify them, the government would do well to permit a one-time revision to the GSTR 3B form for March 31, 2018 and March 31, 2019. 3B is a form that most taxpayers are familiar hence filing this revision should not pose any issues. Introduction of the new system of filing returns has been postponed to April 2020.

The GST Council also cancelled the controversial Circular No.105/24/2019-GST, which attempted to clarify various doubts relating to post-sales discounts but ended up creating further confusion. The Circular had some strange clauses, such as “if the additional discount given by the supplier of goods to the dealer is the post-sale incentive requiring the dealer to do some act like undertaking special sales drive, advertisement campaign, exhibition etc., then such transaction would be a separate transaction and the additional discount will be the consideration for undertaking such activity and therefore would be in relation to supply of service by dealer to the supplier of goods. The dealer, being supplier of services, would be required to charge applicable GST on the value of such additional discount”. What should worry the GST Council is how and why such Circulars which bring up more questions than answers are being issued. It could probably be traced to a lack of training and awareness on the part of the tax officers on the intricacies of GST laws. The CBIC should proactively engage with the officers to ensure that controversial circulars are not issued.

The GST Council did not provide any specific relief to the automobile or textile industries. Instead, they proposed reduced rates on an eclectic variety of items, such as slide fasteners, wet grinders (consisting of stone as a grinder), marine fuel and dried tamarind. Probably with a view to encourage tourists, GST on room tariff and outdoor catering were reduced. The GST Council also solved the controversy surrounding the levy on fishmeal by providing an exemption between July 1, 2017 and September 30, 2019. There were doubts with regard to taxability of fishmeal in view of the interoperatational issues. However, any tax collected for this period shall be required to be deposited.

As the GST journey continues, it is becoming increasingly apparent that both the Department as well as the taxpayer are facing issues due to a law which was implemented in a hurry and added unnecessary baggage when introduced. It could probably take another couple of years for the law to settle, provided the GST Council, CBIC and the taxpayers continue the process of learning and unlearning.

The writer is a chartered accountant

Published on September 25, 2019

A letter from the Editor

Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.