The GST Council is slated to meet tomorrow ahead of Union Budget 2018 and it is highly expected that some big bang changes can be made. Among them are rate cuts on some 70-80 items, simple return filing norms and changes in respect of laws for simplifying procedures for better compliance.
Rate cut on some 70-80 goods and services
GST Council headed by Arun Jaitley in its 25th meet shall push for further rate cuts on some 70-80 goods and services. Items including handicrafts, irrigation equipment, electric vehicles can be put to a lower slab rate.
The rate cut shall augur well for the industry but for the government it means lower collection. In the November month, there was a steep reduction in GST collection at Rs. 80,808 crores in comparison to July which saw a collection of Rs 94,063 crore.
Items such as electric vehicles, irrigation equipment and handicrafts are likely to be brought down to a lower slab.
Last time the cuts had been implemented across 200 goods and services in November which is expected to hurt revenue by Rs. 20000 crore on an annual basis.
Single return filing form to simplify compliance for small businesses
As against the current practise, there has news making rounds that a single form consolidating GSTR1 (outward supply), GSTR2 (inward supply) and GSTR3 (the final netted out return) can be formulated to ease the compliance process for small enterprises.
An official said, "Businesses will still have to file GSTR3B (summary form) for the next six-months, till the time the new simplified and single return form becomes a reality".
With it the number of tax returns to be filed under GST in a year will be reduced to 12 instead of 37. The invoice matching rule shall remain as though.
Amendment in law and rules
Rules governing input tax credit claim can be overhauled and there can an instance wherein large service providers with presence in more than ten states and a turnover of over Rs. 5 crore can be allowed single registration.
RCM or reverse charge mechanism can be further postponed beyond April 1, 2018.
Read about Reverse charge mechanism under GST.