GST Council meeting to consider ease of filing returns, refund processes

Narendra Modi had said earlier this week that less than 1% of all items would remain in the 28% slab

The coming Goods and Services Tax (GST) Council meeting will primarily delve into issues that will ease the filing of returns and the refund processes for small and mid-size businesses.

 Officers will meet on Friday and finance ministers the next day. Cutting GST rates on some items in the (top) 28 per cent slab (such as big screens, DSLR cameras and cement) will be discussed. However, only items where there is reasonable certainty of improved compliance will see a rate cut, said sources. Following the demand of the cement industry majors to reduce rates, global photography majors wrote to Finance Minister Arun Jaitley, demanding the GST be slashed to 18 per cent. 

Prime Minister Narendra Modi had said earlier this week that less than 1 per cent of all items would remain in the 28 per cent slab. Officials Business Standard spoke to indicated this change would take time. 

Sources said if states and the Centre agree, businesses with an annual turnover up to Rs 50 million would become eligible to file quarterly returns, as against monthly returns. Currently, the upper limit is Rs 15 million.

According to official estimates, less than 15 per cent of all monthly filers contribute 85 per cent of the GST paid. "More than six million monthly return filers are small and medium GST payers. A quarterly return for these businesses would reduce the pressure on the GST Network (information technology) system by almost a third,” a person in the know said. He said the system gets clogged towards the end of the month.

The Council might also discuss reducing the pressure of scrutiny on honest filers, sources said. The possibility of paying refunds without matching of invoices would be considered. Under a proposal, matching of the GSTR-3B and GSTR-1 returns would be resorted to only if tax is not paid by the filer in question.

Voices from states on return simplification and analysis of the revenue position will also be discussed.

A group of state finance ministers was set up after the Kerala floods. It is likely their draft report will be discussed in the Council meeting.

On the table

• Businesses up to Rs 50 mn annual turnover might be allowed to file quarterly returns; the current limit is Rs 15 mn 
• Invoice-matching for refunds only if tax not paid
• Rate cut for big screens, DSLRs