The GST Council meet chaired by the Finance Minister Arun Jaitley on Friday discussed a wide range of issues including ownership of GSTN, digital payments discount, sugar cess and simplification of GST returns forms. The 27th GST Council meet, which took place via video conferencing, deferred the decision on levying any cess on sugar as it faced opposition from several states.
The issue of imposing a sugar cess in the wake of mismatch in prices was deferred. It was agreed that a committee comprising of five state finance ministers will recommend its suggestions to the GST Council. The panel will look for avenues available with the government in case of contingencies like the one where sugar is selling at prices lower than the market price and farmers are suffering losses.
Opposing the move to introduce a cess on specific items, Kerala Finance Minister Thomas Isaac told CNBC TV18 that a new cess on a particular commodity would add to the confusion. "If there is a sugar cess then there should be a cess on rubber as farmers in Kerala have suffered losses too," Isaac said.
Under fire from various quarters over the ownership of GSTN (Goods and Service Tax Network), the Finance Minister said that the government is considering to buy the 51 per cent stake in the GSTN which is currently held by private entities. As of today, only 49 per cent is held by the government. This includes 24.5 per cent each by central and state governments.
According to the proposal, the Centre will hold 50 per cent and the rest of the 50 per cent will be held by state governments. The share of state governments will be decided on a pro-rata basis depending on the revenue generated by each state, Jaitley said in the press briefing.
GSTN is a not-for-profit organisation owned by the government and private players jointly. It serves as the technology backbone to India's most ambitious indirect tax reforms and runs the GST portal.
To popularize small digital transactions, a 2 per cent incentive on digitised payments will be given to those who pay entire sum in digital way. However, the discount/incentive will be capped at Rs 100. The Finance Minister said a committee of 5 ministers from the states will be constituted which will consider different viewpoints on this issue.
Jaitley added that while most states were in favour of giving a 2 per cent incentive if all payments are paid digitally or through cheques, some wanted a small negative list.
Simplified return filing
On simplification of filing of GST returns forms, Finance Secretary Hasmukh Adhia announced a new simplified return that would require a taxpayer to file only one return every month.
"It will take about six month for GSTN to prepare for it so for that period the current arrangement of GSTR3B and GSTR 1 will continue. This will be the first phase of transition where the current system will continue for the next six months," said Finance Secretary Hasmukh Adhia.
"Composition dealer and zero transaction dealers will continue to file on a quarterly basis. Today, we find that the returns which are filed, 30% are nil returns, which means there is no transaction on them," Adhia added.
The crucial GST Council meet comes at a time when GST revenues crossed Rs 1 lakh crore for the first time. As mentioned by the Ministry of Finance, the total gross GST revenue collected in April was Rs 1,03,458 crore.
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