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GST Council meet: Extension to NAA, annual return filing deadline

The Council also approved allowing Aadhaar as a document for registration under GST, while referring the legal view regarding levy of taxation on lottery to the Attorney General (AG) since some cases disputing the levy are pending in courts.

By: ENS Economic Bureau | New Delhi |
June 22, 2019 1:38:21 am
Finance Minister Nirmala Sitharaman along with MoS Finance Anurag Thakur and Revenue Secretary Ajay Bhushan Pandey during the 35th GST council meeting in New Delhi, on Friday. PTI

A two-year extension to the National Anti-profiteering Authority (NAA), approval to electronic invoice system for business-to-business (B2B) transactions from January 2020 and a two-month extension in the June 30 deadline for annual returns was approved in the 35th meeting of the Goods and Services Tax (GST) Council Friday. The meeting, first to be chaired by Finance Minister Nirmala Sitharaman, however, referred the rate-related changes for electric vehicles (EVs), solar power generating systems and wind turbines to the fitment committee.

The Council also approved allowing Aadhaar as a document for registration under GST, while referring the legal view regarding levy of taxation on lottery to the Attorney General (AG) since some cases disputing the levy are pending in courts.

As per an official release, approval was also given to mandatory generation of electronic ticket by registered multiplexes, who shall be required to issue a tax invoice electronically. The electronic ticket issued by them shall be deemed to be a tax invoice.

Explaining the rationale behind seeking the AG’s opinion on taxing lotteries, Sitharaman said the principle of taxation under GST is that it should be one rate across the country, whereas in the case of lotteries, two rates are being charged. “Hence, it was decided to obtain clarity on Article 340,” she said. Currently, a state-organised lottery attracts 12 per cent GST while a state-authorised lottery attracts 28 per cent GST.

The electronic invoicing system will be introduced in a phase-wise manner for B2B transactions, with the first phase expected to be rolled out from January 2020. “E-invoicing is a rapidly expanding technology which would help taxpayers in backward integration and automation of tax relevant processes. It would also help tax authorities in combating the menace of tax evasion. The Phase 1 is proposed to be voluntary and it shall be rolled out from Jan 2020,” the release said.

The e-invoice will subsume generation of e-way bill. “Under the proposed plan, invoice can be generated on a portal and can act like an e-way bill,” Ajay Bhushan Pandey, Revenue Secretary, said. The Council also gave its in-principle approval to the transition plan for the proposed new return filing system, wherein small businesses, with aggregate annual turnover in the previous financial year upto Rs 5 crore, would file their first compulsory quarterly return in January 2020.

On the extension for deadline for filing annual returns for 2017-18, Pandey said several representations were made by traders and businesses. “On account of difficulties being faced by taxpayers in furnishing the annual returns in FORM GSTR-9, FORM GSTR-9A and reconciliation statement in FORM GSTR-9C, the due date for furnishing these returns/reconciliation statements to be extended till 31.08.2019,” the release said.

Approval was also given to impose a penalty of up to 10 per cent of the profiteered amount on entities for not passing on benefits of GST rate cuts to consumers, as against the current norm of levying a maximum fine of Rs 25,000. Compliance related issues also featured in the meeting, with Pandey saying the Centre has shared details relating to generation of fake invoices with states.

He added that the electronic triangulation of data through monitoring customs/shipping bills, Income-tax returns and GST returns will help in strengthening enforcement and raising red flags about tax evasion. A resolution acknowledging the former Finance Minister and Chairperson of GST Council Arun Jaitley was also passed by the Council.

Tax experts welcomed the extension in the deadline for filing annual returns and said that the electronic ticketing for multiplexes seems to be an extension of e-invoices system for B2C transactions. Pratik Jain, Partner & Leader, Indirect Tax, PwC India said, “Decision to use Aadhaar for the purpose of registration is a significant step and could lead to similar linkages with income tax as well in times to come. Decision to implement e-invoicing model means that technology will continue to play a critical role in tax administration. While this system could initially be implemented for B2B segment only, but with e-ticketing for multi-screen cinema halls a similar mechanism is also proposed for B2C segment. If this experiment turns out to be successful, one could see this mechanism getting extended to other B2C segments as well.”

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