Crucial GST Council meet amidst economic slowdown

The 37th GST Council meeting is scheduled to be held in Goa on 20 September 2019. In view of the economic slowdown, especially in the automobile sector, the industry is expecting significant announcements to boost trade. The key agenda items of the Council meeting have been captured in this alert.

1. Annual return and audit wavier for small businesses
   It is expected that the GST Council will waive off the requirement to file annual returns in GSTR-9 for businesses having an annual turnover of less than INR 20 million. A proposal to waive off the filing of reconciliation statement/audit in GSTR-9C for businesses with an annual turnover of less than INR 50 million is also under consideration.
2. Staggered return filing deadlines
   To avoid burdening the GST network which results in technical glitches on compliance due dates, the GST Council is expected to approve different due dates for large and small taxpayers for filing of GST ANX-1, GST ANX-2 and GST RET-1 under the new return filing system.
3. Reduction in GST rates
   Considering various representations received from the industry, the Council is expected to discuss a reduction in GST rates in multiple sectors such as automobiles, biscuits, real estate, and hotels. However, as per news reports, the fitment committee has decided not to tinker with the present GST structure for biscuits, bakery products, breakfast cereals, fruits and vegetables, mineral water, ready-to-eat packaged items, and several other food products.
4. GST on the healthcare sector
   The healthcare providers are demanding the introduction of GST at the rate of 5% on their outward supplies. Currently, the outward supplies in the healthcare service industry are exempted of GST, which results in blockage of input tax credit and a further increase in costs.
5. Single window clearance for refunds
   The Council is expected to deliberate on the formation of a single window for sanctioning and processing exporter refunds. This should expedite the process of issuance of refunds which is currently delayed because of the requirement to obtain sanctions from both Centre and State GST officers.
6. Clarification on cross-charge of common expenses
   The GST Council is expected to discuss and issue a clarificatory circular about input tax credits of common expenses incurred at the head office/centralized location and cross charged to branches.
7. Other agenda items
   • A resolution for issues faced by businesses due to inverted duty structure in various sectors is expected to be discussed. The solution is expected to be either in the form of expediting refund procedures or restructuring of GST rates.
   • The Council is expected to consider the proposal to introduce composition schemes for suppliers engaged in supplying brick kilns, sand miners and stone crushers. The GST rate under the composition scheme is expected to be at 12%.
   • A proposal to tax the supply of mentha oil under reverse charge mechanism is also under consideration.
   • The Kerala government's proposal to bring transport of gold and precious stones within the ambit of e-way provisions is also expected to be deliberated upon by the GST Council.
   • In view of the creation of Union Territories of Jammu & Kashmir and Ladakh, the GST Council is expected to recommend amendments to incorporate required changes in the GST law.
   • The GST Council is expected to approve the proposal for mandatory linking of new registrations with Aadhar from January 2020.