Indian government sets up committee to readdress GST

The Indian government has set up an advisory group within the GST Council to address complaints that have been raised over the GST, including from many in the apparel and textile industry.

The Indian government has set up an advisory group within the GST Council to address complaints

One of the reasons that the GST was introduced in place of the previous value added tax (VAT) system was to make compliance easier. However, this is one of the very complaints that has been lodged against it. In order to address this, the GST Council’s new advisory group will work to simplify the GST’s return forms to try and make it easier to businesses to know how much GST they really have to pay and to ameliorate compliance.

The GST Council advisory group that comprises industry representatives and they have so far set out some proposals for ways of making the GST more favourable to businesses. One of these is to defer the e-way bill until 2019 and allow for no interest on late payments. Other proposals include abolishing the reverse charge mechanism, making inter-state sales require less paperwork, and allowing for a composition scheme. These proposals and several others will now be taken up with the review committee which will address GST grievances and give formal recommendations by the end of December.

The GST Council has already approved increasing the income limit on the composition scheme’s flat tax initiative. This would mean that businesses with income up to 1.5 crore rupees (previously one crore rupees) could apply for a flat tax rate. However, in order for this to go through, the law needs to be changed.

The GST Council has already made some changes to the GST, which they rolled out at the start of the month and businesses are eagerly awaiting whether the advisory group will be able to push through more reforms to the tax system.

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