No GST relief for automobiles

deepak mehto
By deepak mehto September 21, 2019 17:08

Aadhaar link for registration proposed

  • From October, taking the family for a holiday is set to become a more economical affair, but the consumption of energy drinks will become more expensive, following a marathon meeting of the GST Council that lasted nearly nine hours.
  • While the tax rates were tweaked up or down for several goods and services, the Council left the rates on products like automobiles and biscuits that had been clamouring for a rate rationalisation in view of falling sales.
  • Among many procedural changes, the Council arrived at an ‘in principle decision’ to link Aadhaar with registration of taxpayers under GST and examine the possibility of making Aadhar mandatory for claiming refunds.
  • To factor in the creation of UTs of J&K as well as Ladakh, suitable amendments in the Central GST Act, the UTs’ GST Act, and the corresponding State GST Acts have also been approved.
  • The GST rate on hotel rooms with tariffs above ₹7,500 per day, which is presently 28%, has been reduced to 18%, while the tax on rooms with a transaction value of ₹1001 to ₹7,500 per day will be 12%, down from 18% currently.
  • Similarly, the rate on outdoor catering services in premises other than hotels with a daily tariff of ₹7,501 or more, has been reduced from 18% at present (with input tax credits) to 5% without these credits.
  • The tax levied on caffeinated beverages has been raised from 18% to 28% with an additional compensation cess of 12%, in a bid to deter their consumption. While this brings the tax on such beverages on par with aerated drinks, the Council has decided to disallow firms that make the latter from joining the Composition scheme.
  • The tax levied on wet grinders that consist of stone, has been slashed from 12% to 5%, while the GST on dried tamarind and plates/cups made up of leaves, flowers or bark have been reduced to nil from 5%.
  • Several measures have been taken to boost exports, including a zero GST on the export of jewellery and a reduction in the GST levied on cut and polished semi-precious stones from 3% to 0.25%.
  • The mere act of heating leguminous vegetables like gram and lentil for removing moisture, or to soften and puff it or removing the skin, would not attract GST. However, if any other ingredients like salt or oil are added on, then it would be a taxable activity.
  • The only relief offered to automobile producers was a reduction in the cess on large passenger vehicles that can carry 10 to 13 persons.
  • The cess on such vehicles will be reduced from 15% over and above the 28% GST rate, to 1% for petrol vehicles of certain specifications and 3% for diesel vehicles.
  • The auto industry’s hopes have evaporated, but it was stoic in response.
  • The reduction in GST Compensation cess is a long pending request of Society of Indian Automobile Manufacturers (SIAM) that has been partially met as they were hopeful of abolishing compensation cess for the whole segment of 10-13 seater vehicles.
  • SIAM President said that the industry has to find its own balance to enhance demand.
  • Stressing that there is room to reduce GST rates on vehicles once growth revives and the exchequer’s revenue considerations ebb, he said that the festive season with positive financial market boost noticed, will bring positive consumer sentiments.
  • Revenue Secretary said that the new returns system proposed to simplify tax filing under GST will kick in from April 2020.
  • A committee of officers is to be constituted to examine the simplification of annual return forms and reconciliation statement that taxpayers have to contend with.
  • For taxpayer disputes that are held up as GST Appellate Tribunals are not yet functional, the Council decided to extend the last date for filing appeals against the Appellate Authority in the indirect tax regime.
deepak mehto
By deepak mehto September 21, 2019 17:08