New Delhi, August 9, 2017

Says proposal to hike compensation cess on cars is “corrective” as tax rate had reduced post-GST

Allaying concerns over possible difficulties in filing of returns under the Goods and Services Tax (GST), the Central Board of Excise and Customs Chairperson Vanaja N Sarna said a lot of effort has been put in to ensure it is a smooth process.

“We have done a lot of testing and we hope that the IT system will be robust as a very large number of invoices will be uploaded,” Sarna told BusinessLine, adding that the GST Council has also extended the timeline for filing returns for the first two months.

With nearly 80 lakh taxpayers expected to upload over 300 crore invoices every month on the GST portal, return filing is seen as the next big challenge for the new levy.

“By pushing back return filing, we gave a cushion of time for both the trade and industry and the department offices…assessees now have begun to understand GST, the HSN code and rate for their items,” she said.

Facilities launched

To prevent a last day rush — as in the case of filing of income tax returns, Sarna pointed out that the GST Network has already launched most facilities, including that for uploading of invoices.

“There is also an offline tool available. In areas with intermittent Internet connectivity, assessees can fill up everything and upload it when Internet is available,” she said.

The CBEC chief’s comments come at a time when assessees are getting ready to file their first return under the new tax regime. Form GSTR – 3B which gives details of inward and outward supplies for the month of July has to be filed by August 20. The CBEC has also notified the dates for filing the full returns for the month of July and August.

Form GSTR-1 for the month of July has to be filed between September 1 and 5, while Form GSTR-2, which gives details of inward supplies, has to be filed between September 6 and 10.

Form GSTR-3 for July will now have to be filed between September 11 and 15. Similarly, the process of return filing for the month of August will be completed by September 30.

Cess on cars

The CBEC chief also stressed that the objective behind the proposal to increase the cess on automobiles is to take “corrective action” as tax rates and prices of cars had reduced post introduction of GST.

“We need to bring it back to the way it was pre-GST. The intention was not to give a benefit to anyone,” Sarna said.

The GST Council, in its meeting on August 5, had recommended that the Centre should amend the GST (Compensation to the State) Act, 2017 and hike the compensation cess on SUVs, mid-sized, large and luxury cars to 25 per cent from the current rate of 15 per cent.

Noting that the Council has approved the legislative change, she said that the exact calculation of the cess is yet to be done.

“A cess of 25 per cent is the maximum and the Council may decide not to impose it but impose it at somewhere between 15 per cent and 25 per cent based on how the prices work out,” she said.

The tax incidence on these cars before GST was between 52 per cent and 55 per cent, while under GST it had reduced to 43 per cent.

[The Hindu Business Line]