As per media reports, the 20th GST Council meeting, held on 5 August 2017 included discussion on matters relating to e-way bill, anti-profiteering measures and revision in tax rates of certain goods and services.
The key decisions taken at the council meeting are summarized below:
- Revision in GST rates: • Job work services across the textile chain will be taxed at 5%. • For goods transport agencies and rent-a-cab service, an option has been provided to pay GST at 12% and claim full ITC. • Aggregators offering small house-keeping services (eg. plumbing) will be liable to pay GST on the services provided through them. • Works contract provided to Government will be taxed at 12%.
- Approval of e-way bill rules: Rules on e-way bill were approved and are likely to be implemented from 1 October 2017. The rules specify pre-registration of all goods valuing more than INR 50,000 before they are moved for supply beyond 10km. • Increase in cess on motor vehicles: The Council has recommended to increase maximum ceiling of cess leviable on motor vehicles from 15% to 25%. • Anti-profiteering measures: The Council approved setting up of Central and state- level anti-profiteering committees in the next 15 days.
The next GST council meeting is scheduled on 9 September 2017 to decide on revision of rates for other items.
Comments: a. The notification to give effect to the changes in GST rates is awaited. It will need to be seen whether the new rates are made effective retrospectively from 1 July 2017. b. Reduction in the tax rate on job work across the textile supply chain is a welcome step and will provide much awaited relief to the textile industry. It will also help correct the anomaly of inverted tax structure faced by the industry. c. Exemption from e-way bill for transportation of goods could have been extended to transportation within the city or town, instead of restricting it to 10km. d. Finalized rules on e-way bill should be placed in the public domain soon, to help industry prepare for the compliance. e. Based on international experience, the government should provide for a clear mechanism to compute benefits under GST in order to be compliant with anti-profiteering provisions. This will avoid unwarranted litigation. Industry should also analyze the impact of GST on their goods and services considering the changes in cost structure and profitability.
Latest posts by CA Shivangi Gupta (see all)
- GST Exempt Goods List - September 4, 2017
- Tax Audit and ITR filing due date extension AY 2017-18 to 31-10-2017 - September 3, 2017
- E-way Bill – GST/ Road Permit GST - September 3, 2017