The GST Council is expected to extend till November 30, 2020 the tenure of the National Anti-profiteering Authority (NAA), which deals with customer complaints regarding not receiving tax cut benefits, at its next meeting on June 21. The Council at its 35th meeting, the first under new Finance Minister Nirmala Sitharaman, is also likely to consider a proposal to set up one appellate tribunal for north-eastern states, and another one for all Union Territories.
Besides, the Council would discuss a proposal to levy Goods and Services Tax (GST) on extra-neutral alcohol (ENA), which is used for manufacturing alcoholic liquor for human consumption. ENA a is derivative of sugarcane molasses (95 per cent high-purity ethyl alcohol) and is not an alcoholic liquor for human consumption but can be used as raw material or input, after processing and substantial dilution, in the production of whisky, gin, country liquor etc.
The Finance Ministry is reportedly of the view that NAA should be given an extension of one year till November 30, 2020 as the authority continues to receive complaints of profiteering by companies. The NAA is keen for a two-year extension, the official said, adding the final call will be taken by the GST Council in its meeting on June 21.
Earlier, the meeting was scheduled for June 20, but has now been postponed to June 21. Soon after the GST was rolled out from July 1, 2017, the government had approved setting up of the NAA for two years to deal with complaints by consumers against companies for not passing on GST rate cut benefits.
The NAA came into existence on November 30, 2017, after its Chairman B N Sharma assumed charge. So far, the NAA has passed 67 orders in various cases. The GST law provides for setting up of benches of appellate tribunal in all states. Although 18 states have got the approval to set up appellate benches, none of these states have operationalised them. The GST Council in its June 21 meeting is likely to approve the proposals of Delhi, Odisha and Telangana to set up appellate tribunal benches.
The Council will also take a call on setting up a combined bench for all north-eastern states as well as one bench to deal with appeal cases in six Union Territories — Chandigarh, Puducherry, Lakshadweep, Daman and Diu, Dadra and Nagar Haveli, and Andaman and Nicobar Islands, the official said.
With regard to bringing ENA under GST, states have divergent views on levying GST. Larger states like West Bengal, Rajasthan, Haryana, Tamil Nadu, Karnataka, Andhra Pradesh and Maharashtra have been of the view that ENA should be out of GST.
States levy Value Added Tax (VAT) and Central Sales Tax (CST) on ENA and states will have to forgo the right to tax the product if it is brought under GST. The GST Council had earlier sought the opinion of the Attorney General on legality of imposing GST on ENA. The AG had then opined that since ENA is not consumed directly by people, GST can be imposed on it.
Currently, potable alcohol is out of the ambit of GST and states are free to levy taxes on them. Among other things, the GST Council will also consider issuance of e-invoice by entities with turnover of over Rs 50 crore for business-to-business (B2B) sales in a bid to curb GST evasion.
The Finance Ministry has meanwhile said the new monthly GST return filing system will be rolled out from October. The rollout is three months behind the schedule. The ministry was originally targeting a July rollout of the new return system as mandated by the GST Council last year.
The existing monthly summary returns GSTR-3B shall be completely phased out from January 2020 when the new form ‘GST RET-01’ is set to replace it, the ministry said while announcing the roadmap for ‘Transition plan to the new GST Return’. Elaborating on the system, the Finance Ministry said businesses will be able to use the new return filing system (ANX-1 and ANX-2) on a trial basis for three months from July to September 2019, which will help them familiarise with the system. “From October, 2019 onwards, Form GST ANX-1 (outward supply details) shall be made compulsory and Form GSTR-1 would be replaced by Form GST ANX-1”, the ministry said.
Large taxpayers (with aggregate annual turnover over 5 crore in the previous financial year) would upload their monthly Form GST ANX-1 from October 2019 onwards. For October and November, 2019, large taxpayers would continue to file GSTR-3B on monthly basis. They would file their first Form GST RET-01 for the month of December, 2019 by January 20, 2020, the ministry said. However, small taxpayers (with aggregate annual turnover in the previous financial year up to Rs 5 crore would file their first compulsory quarterly Form GST ANX-1 in January 2020 for the quarter October to December, 2019.
Small taxpayers will stop filing GSTR-3B and replace it with GST PMT-08 from October 2019 onwards. They will have to file GST RET-01 for the December, 2019, quarter from January 20, 2020. “It may be noted that invoices etc. can be uploaded in Form GST ANX-1 on a continuous basis both by large and small taxpayers from October, 2019 onwards,” the Ministry said. Under the current return filing system, GST registered businesses file summary sales return GSTR-3B every month and pay taxes. They also file monthly outward supply details in GSTR-1.
In the new return filing system, GSTR-3B would be replaced by GST RET-1 and GSTR-1 by GST ANX-1. GST-ANX-2 gives the inward supply details which in the current system was required to be reported under GSTR-2, but was later kept in abeyance as taxpayers faced difficulties. From January 2020 onwards, all businesses would shift to new return filing system with entities above Rs 5 crore turnover filing GST RET-1, GST ANX-1 and GST ANX-2. Those with turnover below 5 crore in the previous financial year would have to file GST PMT-08, GST RET-01.
As per the transition plan, from July, 2019, users would be able to upload invoices using the Form GST ANX-1 offline tool on trial basis for familiarisation. Further, users would also be able to view and download, the inward supply of invoices using the Form GST ANX-2 offline tool under the trial programme. “The summary of inward supply invoices would also be available for view on the common portal online. They would also be able to import their purchase register in the Offline Tool and match it with the downloaded inward supply invoices to find mismatches from August 2019,” the Ministry added.
Last month GST Network had released a demo tool for the new and simplified return filing form to give stakeholders a feel of what the new return filing system will look like. The GST Council in July last year decided that the simplified GST return forms would be rolled out on a pilot basis from April 1, 2019, while mandatory filing across the country was scheduled to kick in from July, 2019.
In the proposed system of new GST return filing, a normal taxpayer would have to file form GST RET-1 (Normal) or Form GST RET-2 (Sahaj) or Form GST RET-3 (Sugam) on either monthly or quarterly basis. Under the new system, regular taxpayers with a turnover of up to 5 crores can file GST returns on a quarterly basis. Annexure of outward supplies (ANX-1) and Annexure of Inward Supplies (ANX-2) will be filed as part of these returns. All the outward supplies will be detailed in GST ANX-1 while GST ANX-2 will contain details of inward supplies auto-populated mainly from the suppliers’ GST ANX-1.
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