The thirteenth meeting of Goods and Services Tax (GST) Council finalised five sets of rules pertaining to registration, return, payment, refund, invoice debit and credit note, while tentatively approving four sets of rules relating to input tax credit, valuation, transitional provisions and composition scheme.
The four rules, which have been tentatively approved, will be put up in public domain for seeking inputs and suggestions from industry and will be taken up for final approval in the Council’s next meeting on May 18-19 in Srinagar.
“The thing which has come out today is that out of nine sets· of rules, the original five which we had approved, have been corrected in terms of the amendments and brought in consonance with the Acts, those now become final. And the four new rules that have been tentatively approved, will be put in public domain and in the next meeting will be taken up for consideration,” finance minister Arun Jaitley told reporters after the meeting. The next meeting of the GST Council will also discuss fitment of various goods and services in the rate slabs of zero, 5, 12, 18 and 28 per cent. “The next meeting will be held on May 18-19 where besides these rules being given final approval, the rate structure in relation to individual commodities will be taken up for consideration,” Jaitley said. Meanwhile, the officers committee will start work on fitment of rates,
The finance minister said that the Council altered the five rules on registration of entities under the GST regime, filing of returns, payment of tax and refund, invoicing and debit and credit notes in consonance with the GST laws presented in Parliament this week.
Regarding the earlier approved four set of rules, Jaitley said that since these rules were placed in public domain earlier itself, they won’t be put out for industry feedback this time. “These rules were even prepared prior to formulation of principal acts. These rules had to be altered to bring in consonance with the Acts,” he said. The rules for return, registration, payment, invoice and refund were approved in second meeting of GST Council on September 30 last year.
With the government aiming for the rollout of the new indirect tax regime from July 1, the finalisation of rules and fitment of rates in the meeting in May will leave only over a month-and-a-half for the industry to finalise its preparation including configuration of their IT processes. The industry has been asking the government to give it at least three months for preparation before the GST rollout. Tax experts said that the industry in coming days may increasingly demand from the government for the GST rollout to take place from September 1 instead of July 1.
“It’s good that the rules, tentatively approved by the Council, would now be put in public domain for consultation and feedback. Further, the suggestions of various working groups constituted for few sectors would possibly be considered before finalisation of these rules. These rules, particularly those relating to transition and valuation are extremely important for the businesses to take critical decisions and configuration of IT systems. However, given the fact that Council is meeting next on May 18-19 to finalise these rules and rates would be finalised thereafter, implementing GST from July 1 may be extremely difficult for the government. One could expect that voice for September 1 implementation would get stronger over next few days,” Pratik Jain, Partner and Leader – Indirect Tax, PwC, said.
MS Mani, senior director, Indirect Tax, Deloitte Haskins & Sells said, “The government is saying that it is absolutely ready to implement GST, but for a reform of the magnitude of GST to succeed, the industry also has to be equally ready, otherwise it won’t be a successful reform. …”