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Major changes in GST rates on the cards, recommendations on GST rate rationalisation and slabs: GST News In A Minute

  • Dec 20, 2019 | Divita S Gupta

Major changes in GST rates on the cards, recommendations on GST rate rationalisation and slabs: GST News In A Minute

Major changes in GST rates on the cards as government officials met this week to finalise recommendations on GST rate rationalisation and slabs. Read on to know about updates under #GSTThisWeek

Overwhelming feedback over New GST Returns

The Central and State GST authorities organized a nationwide GST Stakeholder Feedback on 7th December 2019 to gain insights on New GST Returns. Feedback was acquired from 125 cities across the country where 7500+ trade associations/stakeholders participated in the programme. There has been an overwhelming response from GST stakeholders and several useful suggestions have been received. Hopefully, the form should be ready in time for its mandatory introduction in April 2020.

Government blocks e-Way Bill generation of non-filers of returns for 2 or more months

The Government has started disabling e-Way bill generation facility of taxpayers in case of non-filing of two or more consecutive GSTR 3B Return on GST portal. The Goods and Services Tax Identification Number (GSTIN) of such blocked taxpayers cannot be used to generate the e-Way Bills either as consignor or consignee.

States seek pruning of GST exemptions

States want substantial pruning of exemptions, particularly in services, under GST, with some states even backing a simpler three slab structure. List of exempted items that was supposed to be small has expanded substantially, particularly on the services side

GST rates could be reset

With revenue collections below expectations, GST rates and slabs could be raised to 6 or 8% and even 15%. Officers from Centre and States met earlier this week to finalise recommendations for rate rationalisation and slabs. Reports say they even considered various options, including raising rates from 5 to 8% and 12 to 15%, and fixing slabs at 10 and 20%. The GST rate on branded cereals, mobile phones, pizzas, air travel, air-conditioned rail travel, cruises, high-end hospital rooms, paintings, branded garments, and fine fabrics such as linen and silk may increase. Additionally, healthcare services might be brought under the GST net as it could give a leg up to the ongoing economic slowdown.

New decisions by GST council

  • Input tax credit restricted to 10% instead of earlier 20% if invoices have not been uploaded by taxpayers.
  • Taxpayers who haven't filed GSTR-1 from July 2017 will not be penalised provided they file by January 10, 2020. Additionally, the annual return date for filing GSTR-9c forms have been extended to January 31, 2020.

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Avalara helps businesses of all sizes get GST return filing, e-way bill generation and e-invoicing right with cloud-based GST compliance solutions in India. Goods and Services Tax (GST) rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
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. She has written on topics like mutual funds, insurance, taxes, SME financing for globally recognized banking and financial organizations including ICICI, Aditya Birla Group, News Corp. With a Masters in Business Administration from Symbiosis International University, she currently owns a small business in Mumbai.