New Delhi: The first GST Council meeting chaired by the Union finance minister Nirmala Sitharaman in the midst of Covid-19 global pandemic has failed to cheer the industry and tax experts as the apex body only announced procedural relief such as extension of deadline and waiver of late fee but it did not announce substantive measures like a tax rate cut that will help boost the demand and revive the economy.
"We had a lot of hopes from the GST Council meeting. We were seeking restoration of the Input Tax Credit (ITC) facility on the affordable housing segment which was withdrawn last year. However, nothing for the real estate sector has been announced in the Friday's meeting,” said Manoj Gaur, Managing Director of NCR based Gaurs Group and Chairman of Affordable Housing Committee of real estate industry body CREDAI.
Manoj Gaur also highlights a legacy problem in the GST under which a supplier or seller is required to deposit GST with the government next month if he raises a bill in a particular month even if the buyer or service recipient delays the payment.
“It is binding on me to deposit the GST even if the buyer delays the payment by a few months, otherwise I'm liable to pay interest on unpaid GST. Our demand is that the collection of GST should be on the basis of accruals and it should not become due at the stage of generation of invoice,” he told ETV Bharat.
“No concrete measures have been announced for honest taxpayers in this meeting,” said Manoj Gaur while adding that the extension of deadline or waiver of late fee will only help the defaulters and not the honest taxpayers.
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"The government should also announce some relief for honest taxpayers retrospectively if they are giving relaxation to defaulters," he said.
Despite high expectations, the GST Council did not announce any specific measure for the auto component and auto industry, which were under tremendous pressure even before the outbreak of Covid-19 global pandemic.
Vinnie Mehta, Director General of Automotive Component Manufacturers Association of India (ACMA), says the industry was hopeful that the government would announce some measures to boost the demand.
“Our expectation was that the GST rate on auto components and vehicle industry will be cut from 28% to 18%,” Vinni Mehta told ETV Bharat.
“Demand generation is critical for the survival of the industry and a tax rate cut would help in generation of demand,” he said.
Only procedural relief, no substantive relief measures under the GST
Pritam Mahure, a Pune based GST expert, who has written several books on GST and Value Added Tax (VAT), was left deeply disappointed as the GST Council merely announced procedural relief even after the two months of a complete nationwide lockdown that brought down the industry and businesses on their knees.
“You (the government) have this meeting after three months, you have all the stakeholders and still you are only talking about capping the late fee to Rs 500 per return and that the returns can be filed up to September, October. That's it?” asked Pritam Mahure.
"What is the takeaway for a genuine taxpayer from this meeting? He is regularly filing his GST returns, he is least bothered about the late fee or extension of deadline,” he told ETV Bharat.
Pritam Mahure also criticised the government for not announcing any relief for the worst hit sectors like real estate, tourism, travel and hospitality sectors that have suffered the most due to the lockdown.
Prime Minister Narendra Modi announced a complete nationwide lockdown from March 25 to May end to slow down the community spread of the highly infectious novel coronavirus in the country. The Covid-19 virus has killed over 8,490 people in the country and more than 4,25,000 around the world.
“Where are the substantive measures that taxpayers have been talking about for the last three months? I think there is a huge gap between the expectation of the industry and the measures announced by the government,” Pritam Mahure told ETV Bharat.
(Article by Krishnanand Tripathi)
