GST Council clears rules, states agree to July 1 rollout

The 17th GST Council meeting – the last but one before the final roll out of Goods and Services Tax, mulls over the most crucial issues, has already decided on some and is hopeful of laying the rest of the pending matters to rest.

It has been decided in today’s meeting that the official launch of GST will take place on the midnight of June 30 at Vigyan Bhavan, New Delhi, as scheduled.

However, the time­line for statutory compliances for the first two months has been relaxed. A summary return of self-declaration will be accepted for first two months in place of the prescribed one and so on.

This applies to the proposed e-way bill procedures too. The proposed draft has some impractical provisions of validity of e-way bills from 1 to 15 days linked to a distance ranging from 100km to 1,000km and above – over 100km the validity will expire in 24 hours and for 1,000km in 15 days.

Until further consultations on e-­way bill rules, there will be an alternative route/rule to temporarily regulate movement of goods at checkposts.

The council is now expected to float a request for proposal (RFP) to rope in an IT partner to help in the process of conducting the movement of goods and its regulation at checkposts without delay and stoppages.

Hope the checkpost era comes to an end from the midnight of June 30, 2017.

The big revision came in rates on hotel tariffs. For only hotels with daily tariffs above Rs 7,500, GST rate at 28 per cent will apply. Earlier, the minimum tariff for this tax bracket was above Rs 5,000.

Hotels with tariffs ranging from Rs 2,500 to Rs 7,500 will now enjoy revised GST rate of Rs 18 per cent. However, the much awaited GST rate of five per cent for small restaurants on a par with dhabas has eluded them despite nation-wide strikes observed by this segment.

To the contrary, one would be surprised to see some unexpected relief handed out on a platter to high-end restaurants that attracted GST rate of 28 per cent earlier – it has now been revised downward to 18 per cent.

It was also reported that state-run lotteries will be taxed at 12 per cent while state authorised lotteries meaning outsourced lotteries by the states would be taxed at 28 per cent.

Businesses dealing only in goods can opt for composition scheme whose threshold has been set at Rs 75 lakh by paying GST at a fixed percentage of 2 per cent for manufacturers and 1 per cent for dealers/traders with a new negative list of three items introduced in the present meeting – ice cream, pan masala and tobacco.