The Goods and Services Tax Council, led by finance minister
Nirmala Sitharaman
on Friday introduced more stringent norms to check tax evasion and
extended the tenure of the National Anti-Profiteering Authority (NAA) by
two years to November 2021.
The federal indirect tax body, at its first meeting in the second term of the
Prime Minister Narendra Modi administration, also decided that Aadhaar-based GST identification will now be sufficient for GST registration.
Aadhaar-based
registration will not only simplify the process but also improve ease
of doing
business, as the entities will not be required to submit any
other document to enrol, the Council said.
Besides, it extended the deadline for filing GST returns for fiscal
year 2018 by two months till the end of August from the earlier deadline
of 30 June.
As part of its anti-tax evasion measures, the Council
said that if businesses and merchants guilty of pocketing the benefits
of tax cuts meant for consumers do not return the amount amassed
illegally within 30 days, they will have to pay a 10% penalty of the
profiteered amount. They have to return the entire amount to the
consumer or deposit the money in the consumers’ welfare funds. Earlier,
businesses had to pay a flat rate of ₹25,000 as penalty.
Despite
demands of tax cuts from the industry, the Council focused on
anti-evasion measures and simplification of rules. Proposals to slash
tax rates on electric vehicles, battery chargers and leasing of electric
vehicles were referred to the fitment committee for consideration,
revenue secretary Ajay Bhushan Pandey said. On taxation of lotteries,
the Council decided to seek the attorney general’s view.
The focus
of the first GSTC meeting under the new government indicates that the
centre is keen to iron out gaps in GST implementation, while curbing tax
evasion.
Sitharaman expressed satisfaction with the proceedings
of her first GST Council meeting. “The environment was very conducive
and meaningful discussions happened, absolutely to the point. There was
solid understanding of the issues across the board."
Pandey, who
briefed reporters on the specific aspects, said the GST Council has in
principle cleared an electronic invoicing mechanism for
business-to-business transactions through a designated official portal,
which will also act as the tax return platform. He said the earlier
decision to allow quarterly filing of returns for businesses with up to
₹5 crore in sales has now been built into the statutes.
They, however, have to file taxes on a monthly basis. The new return
forms will be available for big businesses to use on a trial basis for
three months from July. It should become the norm from January 2020.
The
Council also cleared changes in the GST law announced earlier,
including the decision to raise the GST registration threshold from ₹20 lakh to ₹40 lakh.
Multiplexes will also have to issue an electronic tax invoice to improve transparency in ticketing and tax compliance.
Experts
said the imposition of higher penalty for profiteering was a tough
measure, considering the absence of detailed guidelines on price
behaviour. “Now that the Council has approved the extension of the NAA
by two years, one would expect the government to define the rules as to
what constitutes profiteering. This is imperative to reduce potential
interpretational disputes," said R. Muralidharan, senior director,
Deloitte India.