GST Council to meet Commerce minister Nirmala Sitharaman today

The GST Council will meet Commerce and Industry minister Nirmala Sitharaman and representatives of IT, telecom, heavy industry, road transport, banking and insurance sectors on Tuesday to assess the implementation hurdles under the new goods and services tax regime. 

Representatives of civil aviation and railway sectors will make a presentation at the two-day meeting of the GST Council, comprising Union finance minister, minister of state for revenue, and state representatives mainly finance ministers.

Nasscom, which is also scheduled to meet the GST Council, will voice its concerns over the tax treatment of software, and also make a case for single registration under the new GST regime. 

“We support the introduction of GST but the implementation of GST should not complicate the business operations of IT companies,” R Chandrashekar, president of Nasscom, told news agency Press Trust of India.

He said the software association would express concerns with regard to GST implementation during the meeting with GST Council.

Nasscom’s concerns pertain to the classification of software, import of services from related parties, and taxation rules based on a location of receiving services. 

Stating that the first draft of GST law had classified all ‘intangibles’ as services, thereby ensuring a uniform tax rate, the revised law removed the clarification.

This could lead to a situation where software classification can be disputed even under the GST regime. 

According to Nasscom, electronic downloads should be treated as services as the majority practice prevalent globally. 

Nasscom also contends that revisions in the draft GST law do not facilitate offering a single interface for overseas/domestic clients in cases where large service contracts are supplied to multiple client sites from single or multiple delivery centres. 

The revised draft potentially makes onsite services delivered overseas at customer site liable to the payment of GST, followed by a refund, which blocks capital and complicates the transaction. 

Nasscom is of the view that the legislation should clearly provide for centralised registration of central taxes of integrated GST and central GST. 

The GST Council will also deliberate on the issue of jurisdiction of assessees in the new regime. This will be the eighth meeting of the Council since it met for the first time on September 22, 2016.