Finance Minister Nirmala Sitharaman on Tuesday assured further simplification and rationalisation of Goods and Services Tax (GST) regime. She also introduced nine changes in GST law through the Finance Bill to implement recommendations given by the GST Council.
“It (GST) has decreased tax incidence on the common man, reduced compliance burden and logistics cost for trade and industry; and enhanced revenues of the Central and State governments. It is a success of vast proportions. To multiply the benefits of GST, we will strive to further simplify and rationalise the tax structure and endeavour to expand it to the remaining sectors,” she said, while presenting first Budget of Modi Government 3.0.
A Group of Ministers under Deputy Chief Minister of Bihar, Samrat Chaudhary has been assigned to recommend about rate rationalisation. It is expected that the committee will make a presentation before the GST Council next month and accordingly further steps will be initiated.
Amendments
Meanwhile, the Finance Bill has proposed changes in CGST Act 2017 as suggested by GST Council. One such amendment talks about excluding extra neutral alcohol used in the manufacture of alcoholic liquor for human consumption from central tax. Another provision is to empower the government to regularise non-levy or short levy of central tax due to any prevalent general practice. Similar amendments are proposed in IGST, UTGST, and GST (Compensation to States) Acts. Amendment has been proposed to provide the time of supply of services where the invoice is required to be issued by the recipient of services in cases of reverse charge supplies.
Another new sub-section is being inserted to allow the availing of input tax credit in returns filed within thirty days of the date of order of revocation of cancellation of registration. A new section has been proposed to be inserted to provide for the determination of tax not paid or short-paid, erroneously refunded, or input tax credit wrongly availed or utilised from FY 2024-25 onwards.
Commenting on the changes, Harpreet Singh, Partner with Deloitte, said: “Increase in monetary limits for filing appeal by department under direct tax, excise and service tax would resolve pending litigations below the new thresholds, with resultant time and cost savings for taxpayers. One would wish that this paves the way for GST Council to reconsider the said limits under GST laws as well,” he said.
Rajat Mohan, Executive Director with Moore Singhi, said: “The amendments in the CGST Act, 2017 signify a strategic effort to simplify compliance, provide targeted relief and ensure fair tax administration.” Collectively, all these changes enhance the ease of doing business, reduce litigations and support a robust GST framework, he said.