At its 39th meeting, the GST Council headed by FM Nirmala Sitharaman has hiked the GST rates on mobile phones and allied parts from 12% to 18%.
New Delhi| With the Goods and Services Tax collection plunging, the discussion on punishing GST frauds took centre stage at 39th meeting of the GST Council on Saturday.
The GST Council decided to charge interest for delayed payments to be charged on net cash tax liability retrospectively from July 1, 2017.
FM made decisions on Saturday, including raising GST on mobile phones specified parts to 18% from the existing 12%. The Goods and Services Tax on handmade, machine-made matchsticks has been rationalised to 12% while GST on MRO (maintenance repair overhaul) services of aircraft slashed to 5% from 18%. All rate related changes will come into effect on 1 April.
“Mobile phones and specified parts to attract 18% versus 12%. All other items, if there’s a need to calibrate the rates, to remove the inversion, we can take them up at future, an examination of that can happen at a later time,” said finance minister Nirmala Sitharaman.
Sitharaman said the Council also decided to waive the late fee for delayed filing of annual returns for FY-2018 and FY-2019 by entities with a turnover of less than Rs 2 crore. She said the Council has asked Infosys Limited to deploy more skilled manpower and increase the capacity of the GST Network hardware to ensure that the system is glitch-free. The Council asked Infosys, which has designed GSTN, to provide a better-groomed system by July.
“The 6 per cent GST increase will be detrimental to the vision of ‘digital India’,” said Pankaj Mohindroo, ICEA Chairman. “Consumption will be stymied and our domestic consumption target of $80 billion (Rs 6 lakh crore) by 2025 will not be achieved. We will fall short by at least Rs 2 lakh crore,” he said.
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A better GSTN system will be ensured by Infosys by July 2020, said Sitharaman. Infosys chairman Nandan Nilekani would attend next three meetings of the GST Council and update the Council on status of implementation of the decisions taken by the Council and assist in taking appropriate decisions on technology-related issues, said Sitharaman. It may be recalled that Nilekani asked for time until January 2021 to ensure smooth functioning of GST’s IT systems.
To remove glitches from the Goods and Services Tax system, Nandan Nilekani, on behalf of Infosys, made a presentation addressing the system-related issues that are being faced by the taxpayers in the GST system.
Nandan Nilekani asked the Goods and Services Tax Council for an increase in manpower and hardware, but it was highlighted that due to the novel coronavirus outbreak, hardware requirement (most of which is fulfilled by China) cannot be done anytime soon.
The Goods and Services Tax Council agreed to the demand for an increase in manpower and further decisions will be taken in subsequent Goods and Services Tax Council meetings.
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