With the GST Council recently setting up a new advisory group, the Goods and Services Tax could be in for a revamp that is more comprehensive than the tweaks made thus far.
The new panel will have former revenue service officer Gautam Ray as co-convener and will include representatives of small businesses and retail. The group will specifically look at the central, state and integrated GST laws and problems faced by stakeholders due to their provisions.
According to experts, among the key points that may be addressed in a revamp are rules that deal with input tax credit, how to arrive at the value of goods and services for taxation purposes, invoices and determining from where a service is provided. The panel will give its report to the law committee of the council by November 30. This will be reviewed by the committee and forwarded to the GST Council for speedy action.
This, however, is in addition to the changes proposed to the composition scheme to bring relief to small businesses and traders that could be taken up by the GST Council at its upcoming meeting on November 10. The council could also reduce the rate of tax on some goods from 28% to 18% at this meeting.
Traders and small businesses have been complaining about provisions in GST, which was rolled out on July 1 to replace multiple state and central taxes and cess. They have sought the simplification of various rules in multiple representations to the government. Prime Minister Narendra Modi had even indicated on Saturday that the government could take up more measures to ease problems faced by small businesses.
Earlier, the GST Council had raised the turnover threshold for the composition scheme to Rs 1 crore from Rs 75 lakh. It had also set up a group of ministers under Assam finance minister Himanta Biswa Sarma to look at other issues related to taxation under the composition scheme and GST for restaurants. The council is expected to lower the flat tax rate for traders availing of the composition scheme to 0.5% from 1% if they include both taxable and tax-exempt goods in their turnover.
“Till now, the changes have been carried out by way of notifications and instructions,” Pratik Jain, indirect tax leader, PwC told in an interview to ET recently.
“There is a need to do a comprehensive review of changes required in the legislation as well, based on issues that have already been highlighted by industry,” he said.