Goods and Services Tax (GST) Council on Friday gave its stamp of approval for five sets of rules for the new regime and “tentatively” okayed another four.
Racing against time to meet a self-imposed July 1 deadline to usher in a pan-India, all-encompassing indirect tax, the Goods and Services Tax (GST) Council on Friday gave its stamp of approval for five sets of rules for the new regime and “tentatively” okayed another four. Finance minister Arun Jaitley said the latter rules and the all-important fitment of rates would also be formally approved by the council as it meets for its 14th session in Srinagar on May 18-19. Many analysts and industry representatives, however, remained concerned about the possibility of undue transitional pains to businesses if the remaining steps for GST roll-out are hurried and suggested that the new tax could be introduced from September 1.
This, they said, would mean that the GST-related software will have enough time for trial runs as well as for debugging and transfer of data. Only 60% of businesses have migrated to the GST network so far and the fact that rates for specific goods and services will not be available before June could increase the hardship for industries, they added. Jaitley said the council gave approval to five sets of rules on registration of entities under the GST regime, filing of returns, payment of tax and refund, invoicing, and debit and credit notes in consonance with the GST law approved by Parliament.
The other four set of rules — those related to input tax credit, provision related to composition, transition and valuation — have been put in the public domain for feedback. Between now and the next council meeting, a committee of officials will be working on the fitment of rates, the minister said.
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Pratik Jain, partner and leader, indirect tax, PwC, said: “…given the fact that council is meeting next on May 18-19 to finalise these rules and rates would be finalised thereafter, implementing GST from July 1 may be extremely difficult for the government. One could expect that voice for September 1 implementation would get stronger over next few days.” Echoing this view, Archit Gupta, founder and CEO, ClearTax.com said, “The GST Council will release the rates only around May 18. This may lead to delays in system implementation of rate changes. Once new rules and rates are finalised, a period of testing may be essential to the system. MSMEs and SMEs will require more time to prepare themselves with regard to to understanding input credit changes and pricing changes.”