The Goods and Services Tax is all set to be officially launched on the midnight intervening 30 June and 1 July after the GST Council cleared all GST rules and finalized all rates, including the rates for contentious lotteries and revised tariffs for AC hotels downwards.
''We don't have the luxury of time to defer implementation of GST. Council decided categorically it will be implemented from 1st of July onwards,'' Jaitley told the media setting at rest all speculation about a possible delay.
The GST Council fixed GST rate at 12 per cent for state-run lotteries and 28 per cent for the private ones. The Council also raised the ceiling on room rent for AC hotels in the 28 per cent tax bracket from Rs5,000 to Rs7,500. Hotels with tariffs between Rs2,500 and Rs7,500 will now attract a GST rate of 18 per cent.
The Council also cleared rules relating to anti-profiteering, advance ruling, appeals and revision, assessment and audit and funds settlement but left a decision on e-waybills pending subject to further deliberations. States would continue with existing systems till the issue is settled.
The GST Council also relaxed time lines for the filing of returns for July and August. As per the revised return filing schedule, for the month of July, the sales returns will have to be filed by 5 September instead of 10 August. Companies will have to file sale invoice for August with the GST Network by 20 September instead of 10 September earlier.
''With the objective of ensuring smooth rollout of GST and taking into account the concerns expressed by the trade and industry regarding filing of the returns in GST regime, it has been decided that, for the first two months of GST implementation, the tax would be payable based on a simple return (Form GSTR-3B) containing summary of outward and inward supplies which will be submitted before 20th of the succeeding month. However, the invoice-wise details in regular GSTR – 1 would have to be filed for the month of July and August, 2017
''No late fees and penalty would be levied for the interim period. This is intended to provide a sense of comfort to the taxpayers and give them an elbow room to attune themselves with the requirements of the changed system. This not only underlines the government's commitment towards ensuring that all the stakeholders are on board but also provides an opportunity to the taxpayers to be ready for this historic reform,'' a finance ministry release stated.
The facility for uploading of outward supplies for July 2017 will be available from 15 July2017, it added.
''The government is ready to allow late return filing in the first two months,'' Jaitley said. Kerala finance minister Thomas Issac, however, said the IT network for GST was not fully prepared but the Council decided to take the risk rather than delay the rollout.
''It is something like building a bridge while walking over the bridge,'' he said interacting with reporters after the meeting.
In a letter to the finance minister on Saturday, industry body Assocham had raised similar fears and had sought postponement of its implementation. The CII, on the other hand. Wanted the government to stick to the timeline of 1 July.
Twenty-four states have already passed their state GST laws. Rest of them are expected to pass in the next 10 days. The Jammu and Kashmir Assembly was recently adjourned without passing the SGST but it is expected to clear after an all-party panel gives its report.
The biggest indirect tax reform since independence, the GST is expected to give a leg up to more than 2 per cent of India's GDP and create jobs in almost all the sectors, according to analysts.