Page 12 - Banking Finance August 2022

GST NEWS

procedural changes in the GST rules, accepted the recommendations of an- The Centre has repaid Rs. 7,500 crore
including those related to threshold, other ministerial panel on stricter scru- as interest cost for the borrowing in
for filing annual returns for the 2021- tiny and verification of high-risk taxpay- 2021-22 and Rs. 14,000 crore is to be
22 fiscal, a move that will help ease the ers. paid this fiscal year. From 2023-24, the
compliance burden on small players. repayment of principal amount will
The changes were vetted by the GST compensation cess start which will continue till March
2026.
Goods and Services Tax (GST) Council
levy extended till 2026
recently.
The government has extended the
GST rates slashed for
With the amendments notified by the
time for levy of GST compensation cess
Central Board of Indirect Taxes and by nearly 4 years till March 31, 2026. transport cos, tour opera-
Customs (CBIC), businesses have also
As per the Goods and Services Tax (Pe- tors
been allowed to make tax payments on
riod of Levy and Collection of Cess)
The Goods and Services Tax (GST)
the GSTN portal by using IMPS and UPI
Rules, 2022, notified by the Finance
Council slashed tax rates on transpor-
payment modes.
Ministry, the compensation cess will
tation through ropeways and renting
Businesses with aggregate annual turn- continue to be levied from July 1, 2022
of goods carriage and exempted for-
over of up to Rs 2 crore in the fiscal to March 31, 2026.
eign component of tour packages from
ended March 31, 2022 are exempt
The levy of cess was to end on June 30
the tax, providing significant relief to
from filing annual returns for 2021-22,
but the GST Council, chaired by Union
transport and tourism sectors.
as per the amended rules.
Finance Minister Nirmala Sitharaman
The council also offered relief to small
KPMG in India Partner (Indirect Tax) and comprising State FMs, decided to
businesses selling through the
Abhishek Jain said these changes will extend it till March 2026 to repay the
ecommerce route by waiving compul-
help the small players in undertaking loans taken in the last two fiscal years
sory GST registration.
compliances, and will lighten the bur- to make up for the shortfall in their
den for taxpayers with less than Rs 2 revenue collection. It recommended that GST on the
crore turnover to the extent of filing After the 45th GST Council meeting in transport of goods and passengers by
of annual returns under GST. Lucknow in September last year, Ms. ropeways be reduced from 18% to 5%
Sitharaman had said the regime of with an input tax credit.
GST Council removes tax paying compensation to States for rev- It recommended GST on renting goods
enue shortfall resulting from subsum- carriage with operators where the
exemptions on some
ing their taxes such as VAT in the uni-
cost of fuel is included in the consider-
items form national tax GST, will end in June
ation be reduced to 12% from 18%.
Packaged curd, lassi, buttermilk, 2022.
The council argued that the reason for
foodgrains, cereals, honey, papad and However, the compensation cess, lev-
lower rates on the transport of goods
a host of unbranded food items besides ied on luxury and demerit goods, will
and passengers is that petrol, diesel,
hotel rooms with a tariff below 1,000 continue to be collected till March
and aviation fuel are outside the GST.
per night and hospital rooms with a 2026 to repay the borrowings that
daily tariff of over 5,000 are set to were done in 2020-21 and 2021-22 to Road transporters will now have the
become taxable with the Goods and compensate States for GST revenue flexibility to opt for paying GST at 5%
Services Tax (GST) Council accepting loss. without input tax credit or GST at 12%
the recommendations of a panel of with such credit. The option will be
In order to meet the resource gap of
state finance ministers. available at the beginning of a finan-
States due to short release of compen-
cial year.
The date of implementation of these sation, the Centre has borrowed and
recommendations has not been de- released Rs. 1.1 lakh crore in 2020-21 Currently, transport of goods by road
cided, people familiar with the delib- and Rs. 1.59 lakh crore in 2021-22 as attracts GST at the same rates but
erations said. These items are currently back-to-back loan to meet a part of the there is no option to switch from one
exempt from GST. The council also shortfall in cess collection. rate to the other.
12 | 2022 | AUGUST | BANKING FINANCE