NEW DELHI: The Goods and Services Tax (GST) Council has approved a proposal to convert GST Network, the IT backbone of GST, into a government-owned entity, unveiled a new, simplified return filing process, and deferred a decision on imposing cess on sugar following opposition from states. The GST Network currently is 24.5 per cent owned by the Central government, 24.5 per cent held by state governments collectively, and the remaining 51 per cent is with HDFC Ltd, HDFC Bank Ltd, ICICI Bank Ltd, NSE Strategic Investment Co and LIC Housing Finance Ltd.
After the proposed change in shareholding pattern, the Centre will own a 50 per cent stake and the rest will be held collectively by the states. Another important outcome of the meeting was that the Council was able to finalise a road map for introduction of simplified return filing. The new simplified return would require a taxpayer to file only one return every month. The new system will be functional in six months. “It will take about six months for GSTN to prepare for it, so for that period the current arrangement of GSTR3B and GSTR 1 will continue.
This will be the first phase of transition, where the current system will continue for the next six months,” said Finance Secretary Hasmukh Adhia. However, the Council postponed a decision on incentivising the digital payment system. “While most states were in favour of giving a 2 per cent incentive if all payments are made digitally or through cheques, some wanted a small negative list, and so the issue will be referred to a five-member group of state finance ministers,” said Finance Minister Arun Jaitley, who chaired the meeting via video conferencing.
Another group of ministers (GoM) would look at the issue of levy of cess on sugar beyond the GST tax rates. The proposal was opposed by most states. According to Y Ramakrishnudu, Finance Minister of Andhra Pradesh, levy of cess by the government is against the spirit of GST. Any additional cess on sugar will increase the subsidy burden on the state, he said.
Agenda and outcome
Converting GSTN into government body: Council agreed
Cess on sugar: Referred to fivemember council
Incentivizing digital payments: Referred to five-member council
Simplifying returns: After six months, only one monthly return has to be filed