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


Government hopeful of GST collection rising again, tobacco industry likely to face heat of GST collection shortfall and Centre seeks RBI approval for FASTag - all this and more on GST this week. 

GST Network hopeful of rising in collection 
After facing a 19 month drop in GST collections, the Ministry of Finance set up a committee to review ways of bringing up the collection last week. This 12 member panel had its first meeting on 15th October 2019. In a statement to the media, Chairman of the GST Network and Revenue Secretary, Ajay Bhushan Pandey stated that they will be reviewing suggestions by other industries and are hopeful of GST collection rising once again. 

GST on usage of brand logos to garner litigations 
The Government announced last week that they intended to levy GST on brand usage by subsidiaries of a parent company or related parties. Currently, a number of companies allow their subsidiaries or related parties to freely use their brand name and logo. Since this does not involve any payment, no GST has been levied by the Government so far. However, companies are now required to assign a value to allow usage of brand names, logos, etc. to a related entity. Valuation of a brand or logo would not be an issue wherever full input tax credit is available to a recipient but in situations where such credit is limited or disallowed for certain business, it could lead to litigations. 

Intermediary services for international transactions kept out of GST Scope
As decided in the 37th GST Council Meet in September 2019, GST will not be applicable to intermediaries dealing with certain kinds of international transactions. As such, GST ( earlier applicable at a rate of 18%) would not be applicable to brokers/middlemen/intermediaries providing services where both the client making the demand and the recipient of the goods resided outside the country.

Drop in GST Collections could lead to spike in GST rate for the tobacco industry 
Industries manufacturing tobacco in India are likely to face an upward spiral in GST rates as the Government is likely to spike the GST rate on the tobacco industry to cushion the fall in GST Collections. 

New GST return forms may force firms to change ERP systems
Organizations might be required to alter their Enterprise Resource Planning Systems once the new GST forms are introduced in April 2020. The new return systems would follow a workflow driven mechanism instead of the current supplier driven one requiring a lot more details including purchases from unregistered dealers.

Centre seeks RBI approval for expanding usage of FASTag 
The Centre is seeking RBI approval for expanding the usage of radio frequency identification-based FASTags as open-loop cards to enable their use for other transactions. These transactions could possibly include purchase of fuel. The Centre intends to work with the RBI, Revenue and Oil and Gas Ministries to make this possible. 

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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.