Goods and Services Tax Council 27/05/2019 – Posted in: Daily News – Tags: ,

GOODS AND SERVICES TAX COUNCIL

 

For: Preliminary & Mains
Topic covers: Council’s meeting agendas, new plans and policies

 

News Flash

The next meeting of the GST council is now expected anytime in early June.

  • The focus will be on tackling the unfinished agenda requiring immediate attention like tax structure for solar projects, uniform tax rate on state-organised and state-authorised lotteries, taxing non-potable alcohol besides certain changes in the law, extension for the National Anti-profiteering Authority (NAA) and rate rationalisation.
  • Though items that need urgent attention will be taken up first, issues like inclusion of natural gas along with other petroleum products and merging of the 12 per cent and 18 per cent slabs.
  • The Council may also take up the case for extension of the NAA’s tenure, which is coming to an end in November.
  • Aspects like e-invoicing and other measures to plug tax leakages, timelines for new compliance mechanism to be implemented, further rate rationalisation, and industry-specific issues such as those pertaining to solar industry may be discussed, along with few legislative changes, could also be discussed in upcoming GST council meeting.

 

Background

  • The Delhi High Court had last month directed the government to review the tax structure for solar power projects.
  • The government had provided a deemed valuation provision that entailed taxing 70 per cent of contract value as goods, taxable at 5 per cent, and balance 30 per cent as services, taxable at 18 per cent.
  • However, the industry argued that the ad-hoc valuation did not provide a fair estimate of the actual split of goods and services.
  • Typically, the said ratio in the solar sector is 90:10, the industry argues.

 

Goods and Services Tax Council

GSTC is a constitutional body for making recommendations to the Union and State Government on issues related to Goods and Service Tax. The GST Council is chaired by the Union Finance Minister and other members are the Union State Minister of Revenue or Finance and Ministers in-charge of Finance or Taxation of all the States.

As per Article 279A (4), the Council will make recommendations to the Union and the States on important issues related to GST, like the goods and services that may be subjected or exempted from GST, model GST Laws, principles that govern Place of Supply, threshold limits, GST rates including the floor rates with bands, special rates for raising additional resources during natural calamities/disasters, special provisions for certain States, etc.

 

Source: Business Standard

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