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Weekly Roundup – India GST News & Updates you need to know


File your GST via SMS, restrictions under Input Tax Credit - read on to know what's happening around the Goods and Services Tax this week. 

File your GST returns via SMS 
Starting April 2020, taxpayers with ‘Nil’ GST returns will be able to file returns using an SMS system. About 1 in 5 taxpayers will no longer be required to fill forms to file their GST returns. The system will involve taxpayers sending an SMS to a prescribed number and confirming filing ‘Nil’ returns using a one time password. 

Government considers hiking GST rate on exempt goods 
In a bid to counter the shortfall in GST collections (19 month low of Rs. 91,916 crore in September), the Government is internally exploring the possibility of hiking the GST rates of goods with lower rates or implying GST on goods that are currently exempt from GST. Hiking these rates could help the Government cushion the current revenue crunch. 

GST to undergo first comprehensive review since 2017. 
The Government has assigned a 12 member committee of State and Central Government officials to augment GST collections and administration including finding ways to prevent evasion, widen the tax base and improve voluntary compliance- this will by far be the biggest review of GST since it was applied in India in 2017. The first meeting of this committee was held on 14th October 2019. 

Indian Highways Management Company and GST Network sign MoU
A Memorandum of Understanding was signed between the GST Network and the Indian Highways Management Company Limited at the One Nation, One FASTag Conference. This MoU integrates the e-way bill system with the FASTag. This integration will help revenue authorities track the movement of vehicles and ensure that they are travelling to the same destination that the transporter or the trader had specified while generating the e-way bill. 

Input Tax Credit without invoice capped at 20%
In order to curb revenue leakage, the Government has decided to restrict input tax credit under GST to 20% of the eligible amount for a registered taxpayer/ entity if its supplier has not uploaded relevant invoices detailing payments. As a result, taxpayers will be required to ensure regular matching of input tax credit with details available in Form GSTR-2A before claiming input tax credit in their monthly GST return. 

MNC back offices denied GST refunds 
GST authorities in the states of Tamil Nadu, Maharashtra, Haryana and Karnataka have rejected the refund claims on Input Tax Credit of a number of MNC back offices stating that the work done for parent companies cannot be considered as exports and will need to be counted as a service for the same entity. This move is likely to disrupt the business models of many MNCs. 

Automobile manufacturers demand a rate cut in GST
In a bid to overcome the slump caused by declining automobile sales, manufacturers have asked the Government for a reduction in GST rates by at least 10%. The current GST rate of 28% on automobiles is directly related to the decline in sales and a reduction to 10% could help resolve the woes of the automobile sector. 

Exporters issued notice from DRI for GST violations 
The Directorate of Revenue Intelligence has issued notices to nearly 1000 exporters for availing GST exemptions where exports preceded imports. These companies had first exported goods and then imported raw materials but still claimed export benefits in the form of tax leeway and will now be liable to pay Integrated Goods and Services Tax (IGST). 

18% GST On Logos, Brand Names Of MNCs, Banks, IT Firms Proposed
The Government expects to churn out thousands of crores in GST collections if they apply a rate of 18% on usage of brand names and logos. A large number of MNCs will be required to evaluate their branding and logos. Any transaction between related parties is liable even though there is no consideration. This has resulted in the Government asking for companies and banks to place a GST on the brands and logos. 

GST Network to Release New Version of Return Filing Interface this Month
The GST network will be releasing an improved return filing interface on October 22, 2019. 

For regular updates on GST and GST Compliance, visit www.avalara.com 

Avalara is an experienced application service provider (ASP) and partner of authorized GST Suvidha Providers (GSPs). To understand how our cloud-based application Avalara TrustFile GST can help you with GST compliance automation, contact us through https://www.avalara.com/in/products/gst-returns-filing 


Avalara Author
Divita S Gupta
Avalara Author Divita S Gupta
Divita has served as a writer and editor for top financial services organizations in India. Currently, she owns a small business in Mumbai. She acquired a Master's Degree in Business Administration from Symbiosis International University in 2014. She is a baker, blogger and avid reader.