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GST from July amid tech tension

Arun Jaitley with chief economic adviser Arvind Subramanian and minister of state for finance Santosh Gangwar in New Delhi on Sunday. (PTI)

New Delhi, June 18: The GST Council has decided to stick to the deadline to roll out the new tax regime from July but agreed to relax the rules on the filing of returns by companies for the first two months.

It also decided that hotel rooms costing more than Rs 7,500 a night will be taxed at 28 per cent under GST; rooms with tariffs in the range of Rs 2,500-Rs 7,500 a night will be taxed at 18 per cent. Earlier, the council had fixed a tax of 28 per cent for rooms costing more than Rs 5,000 a night.

After the GSTN authority, which will work on the tax filings, informed the council it was not ready with the current deadline, the council agreed to push back the dates for the filings but stuck to the July start-date.

The new filing date for sales in the first month, that is July, will now be September 5 instead of August 10. For August, the date will be pushed to September 20.

Earlier on Saturday, industry association Assocham had written a letter to finance minister Arun Jaitley demanding GST be postponed.

Assocham said it would be difficult for taxpayers to comply with the provisions of the new indirect tax regime because the IT network was not ready. It said during the current phase of GST migration for existing assessees, the server was constantly under maintenance.

"This raises a huge question as to whether the IT infrastructure has been appropriately tested. It also raises questions as to whether this system can survive in the GST era when it had undergone maintenance during the second phase of migration when the traffic was restricted only to migration," Assocham secretary-general D. S. Rawat said.

Jaitley today responded by stating, "To obviate any lack of preparedness, a slight relaxation of time for two months - July-August - has been given. From September, strict adherence to time will go on."

However the minister added that "a number of companies and trade have been raising the issue of lack of preparedness. We don't have the luxury of time to defer GST implementation".

The council also decided to tax lotteries in two segments - with the state-run ones attracting 12 per cent GST and the government-authorised privately run lotteries paying 28 per cent tax.

It also cleared six rules, including on anti-profiteering.

"I hope we are not compelled to use it (anti- profiteering)," Jaitley added.

The latest announcement comes nearly a week after the GST Council revised downwards tax rates for 66 items, including movie tickets of Rs 100 and below, incense sticks, insulin, school bags and computer printers.

Touted as the biggest reform in the country's indirect tax structure, GST will introduce a single tax on the supply of goods and services, right from the manufacturer to the consumer.

Once it comes into effect, it will subsume all central and state-level taxes and levies on all goods and services within an integrated tax having two components: a central GST and state GST.

Jaitley said the the council will meet again on June 30, the eve of the launch, and hold consultations on e-way bills. An alternative or transient rule till then will be in force for truckers.


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