GST Council meeting: Quarterly return filing for all, real estate inclusion on the table

Proposal to have quarterly returns filing and monthly tax payments for all taxpayers, rationalisation of items in the 28 per cent tax slab, a flat rate for all categories of composite dealers, a uniform tax rate of 12 per cent for AC/non-AC restaurants and a discussion paper on bringing real estate in the ambit of the goods and services tax (GST) will be a part of the 23rd GST Council meeting to be held in Guwahati on Friday.
The proposal to have monthly tax payments and quarterly returns filing for all taxpayers was discussed in the previous GST Council meeting as well, following which assesses with annual turnover below Rs 1.5 crore were allowed to pay taxes and file returns on a quarterly basis instead of earlier monthly system starting from October-December quarter. The Centre, however, had opposed the idea saying that the GST design is such that the tax could not be paid without filing the return.
The proposal is, however, has again gained ground as many state finance ministers are supportive of the view that the provision should be extended to all taxpayers. Also, the five-member Group of Ministers (GoM) formed to make the composition scheme attractive under the GST in his set of general recommendations for the GST Council has also recommended an extension of the quarterly returns filing facility to all taxpayers.
A discussion on bringing real estate under the ambit of GST, as was announced by finance minister Arun Jaitley last month, is also part of the Council’s meeting agenda, officials said. Bringing real estate under GST is expected to discourage land hoarding by disincentivising idle inventory of land and will be helpful in better price discovery leading to increased revenues for both Centre and state governments, officials said. However, the government is also of the view that the real estate sector is already under stress and there may be several disadvantages of levying GST on real estate.
Officials pointed out that bringing real estate within the fold of GST may result in reduction of revenue owing to unblocking of input tax credit (ITC) as ITC is unavailable on works contract, building, civil structure and refund of excess ITC is blocked for construction of complexes. It is also believed that the builders may not pass on the benefits of increased ITC to the consumers by recalibrating the prices and may simply add GST to the prices.
Apart from these proposals, the Council will take a final call on the recommendations of the GoM pertaining to the composition scheme. The panel has recommended an increase in the annual turnover threshold for the composition scheme to Rs 1.5 crore from the revised limit of Rs 1 crore and a 12 per cent GST rate for both AC and non-AC restaurants. Apart from the uniform GST rate on standalone restaurants, the Council will also have to decide on allowing input tax credit. The Council will also consider lowering tax rates on 100-150 items in the 28 per cent tax bracket such as handmade furniture, plastic products and daily use items like shampoo.
Source- Financial Express.


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