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New Delhi, March 14, 2020
The GST Council chaired by Finance Minister Nirmala Sitharaman on Saturday decided to raise rates on mobile phones to 18 per cent from 12 per cent now stating that the move would correct the inverted duty structure.
The GST rate on all types of matches (handmade and other than handmade) was also hiked from 5 per cent to 12 per cent.
The Council, however, decided to reduce the rate on Maintenance, Repair and Overhaul (MRO) services of aircraft from 18 per cent to 5 per cent with full ITC (input tax credit) and change the place of supply for B2B MRO services to the location of recipient.
"This change is likely to assist in setting up of MRO services in India," a Finance Ministry statement said after the Council meeting here in the national capital.
The Fitment Committee which comprises senior central and state GST officers had recommended calibrating the GST rate structure to correct the inverted duty structure on various items such as mobile phones, footwear, textiles and fertilizers.
Inverted duty refers to tax rates on inputs being higher than those levied on finished products. This results in higher input credit claims by goods besides several administrative and compliance issues.
The official statement said the Council would deliberate on the issue of calibrating the rate in other items for removing inversion in future meetings with further consultation.
The Council took a slew of measures to facilitate trade and business.
Accordingly, interest for delay in payment of GST would be charged on the net cash tax liability with retrospective effect from July 1, 2017. For this, the GST law would be amended.
Further, in cases where registrations have been cancelled till March 14, 2020 the application for revocation of cancellation of registration could be filled up to June this year (extension of period of application as one-time measure to facilitate those who want to conduct business).
A new facility called 'Know Your Supplier' would be introduced so as to enable every registered person to have some basic information about the suppliers with whom they conduct or propose to conduct business, the Finance Ministry statement said.
Providing further relief to the MSME sector, the Council cleared the proposal to extend the due date for filing the Annual return and the Reconciliation Statement for financial year 2018-19 to June, 2020.
Also, late fees would not be levied for delayed filing of the Annual return and the Reconciliation Statement for financial year 2017-18 and 2018-19 for taxpayers with aggregate turnover less than Rs 2 crores.
In another trade facilitation measures, the Council gave its nod for a special procedure for registered persons who are corporate debtors under the provisions of the Insolvency and Bankruptcy Code, 2016 and are undergoing the corporate insolvency resolution process to enable them to comply with the provisions of GST laws during the resolution period.