Shipments worth up to ₹1 lakh may not need electronic permits under GST
The powerful federal tax body, the Goods and Services Tax (GST) Council, is set to make it easier for businesses and traders to transport goods in the new indirect tax regime by easing the requirement of electronic permits needed for it.
The Council will consider a proposal to exempt goods consignments of up to ₹1 lakh in value from the requirement of obtaining permits called e-way bills, at its meeting on Saturday, according to a person with knowledge of the matter, who spoke on condition of anonymity.
This is a major relaxation in the threshold from the level of ₹50,000 proposed in the draft e-way bill rules the Council had circulated earlier among states. The revision is being considered in view of suggestions received from states, traders and transState porters, said the person quoted above. However, those shipping goods below the revised level, may voluntarily secure e-way bills if they wish.
E-way bills, when implemented, will help central and state tax authorities to keep an eye on factory output and interstate commerce and provide data relating to consumption of goods, which is useful in policy making. governments and union territories have already dismantled the border check posts operated by indirect tax administrations, reducing the time needed for movement of goods across states.
E-way bill rules and the finer aspects of implementing the antiprofiteering mechanism are the two remaining legislative tasks before the Council, besides deciding on the representations received from the industry on tax rates.
Finance minister Arun Jaitley had on Tuesday said in Parliament that the Council will regularly meet every month to “see where the shoe pinches.” The federal tax body, chaired by Jaitley, with having representatives from states and union territories with their own legislatures, is expected to make changes in the tax rates of some commodities on Saturday.
Pratik Jain, partner and leader of the indirect tax practice at PwC India, said services are at present not included in the composition scheme meant to reduce the compliance burden of small traders, manufacturers and restaurants. Under this scheme, these entities with total annual sales of ₹75 lakh could pay 0.5-2.5% GST rate on their total sales without tax credits.
The roll-out of GST so far has not seen any large disruption but the robustness of the IT infrastructure supporting the tax reform is expected to be tested in September, when businesses and traders will file their monthly return for July.
The finance minister said on Tuesday that 7.2 million of the 8 million indirect tax assessees under the earlier tax system have migrated to GST, while 1.3 million new tax payers have also signed up under the new system, indicating the tax base is set to widen significantly by the end of the year.