GST Council waives interest, penalty on tax demands between FY18 and FY20 | Economy & Policy News

Union Finance Minister Nirmala Sitharaman chairs the 53rd GST Council meeting, in New Delhi, Saturday, June 22, 2024. (PTI Photo/Kamal Singh)

It has also given the nod to one of the key amendments in the Central GST Act under Section 11A, which has the potential to overrule retrospective tax demands arising in various sectors.

The amendment will give power to both the centre and states to waive off the GST not paid due to ambiguity of law or on account of “general practices” consistently being followed by the businesses.

The move will have a direct impact on online gaming, foreign airlines, and shipping companies.

To reduce litigation, the Council has approved a monetary limit of Rs 20 lakh for the GST Appellate Tribunal, Rs. 1 crore for the High Court, and Rs 2 crore for the Supreme Court for the filing of appeals by the GST department. Further, it reduced the quantum of pre-deposit required to be paid for filing of appeals under GST.

For small taxpayers, the Council has recommended extending the time limit to furnish the detail and the returns in the form GSTR 4 from April 30 to June 30, Sitharaman said, adding that this will apply for returns for the financial year 2024-25 onwards.

The Council also provided clarity on several goods and services which have been grappling with tax uncertainty.

For instance, it suggested 12 per cent GST on milk cans (steel, iron, aluminium) irrespective of use; cartons, boxes, and cases of both corrugated and non-corrugated paper or paper-board; solar cookers whether single or dual energy source; and sprinklers, including fire water sprinklers.

On services, it exempted certain services provided by Indian Railways and intra-railway supplies. GST relief was also given to students on accommodation services, for up to Rs 20,000 per month per person, if the person stays a maximum of 90 days.

Apart from this, the Council has introduced a sunset clause from April 1, 2025, for filing complaints of anti-profiteering matters. The union minister said that all such matters under anti-profiteering legislation will be handled by the GST Appellate Tribunal. Earlier, the anti-profiteering authority was subsumed with CCI. However, CCI expressed its inability to deal with GST cases.

The Council clarified that a corporate guarantee of 1 per cent on 18 per cent is exempt for businesses where full input tax credit is available. The move follows the appeals companies have filed before high courts.

The Council reconstituted the group of ministers (GoM) on rate rationalisation and asked them to give a status report on the rate rejig in the next Council meeting. This follows the political change in the state government.

On including petrol and diesel under the GST ambit, Sitharaman said that the intent of the central government when the GST was implemented, was eventually that petrol and diesel could be brought into GST. “…Then we don’t have to go and amend the law. The provision has already been made that it can be brought into GST. The states have to agree, come into the GST Council, and decide what rates they agree on.”

Talking about the ease of business, the union minister highlighted that only 1.96 per cent of all active tax assessees have been sent tax notices from the Central GST department till December 31, 2023. This translates to approximately 114,000 out of the total 5,862,000 assessees, indicating a selective and restrained approach in the issuance of tax notices.

“The first meeting after the formation of the new government sets the tone for ensuring measures to ease industry concerns. Sunset clause to anti-profiteering provisions, amnesty for initial years, allowing amendment of outward supplies, and corporate guarantee clarification were the major highlights. Come August, it’ll be interesting to see if a similar sentiment continues, specifically on rate rationalisations and clarifications,” said Abhishek Jain, Indirect Tax Head & Partner, KPMG.

First Published: Jun 22 2024 | 8:32 PM IST