GST Council proposes incentives to promote digital transactions

The GST Council at its 27th meeting today approved the principles for filing of new return design based on the recommendations of the group of ministers on IT simplification. The key elements of the new return design are as follows –

All taxpayers, with a few exceptions like composition dealer, should file one monthly return. Return filing dates may be staggered on the basis of turnover of the registered person to manage load on the IT system. Composition dealers and dealers having nil transaction will have the facility to file quarterly return.

Keeping in view the need to move towards a less cash economy, the GST Council has discussed in detail the proposal for a 2 per cent concession in GST rate (where the GST rate is 3 per cent or more, 1 per cent each from applicable CGST and SGST rates) on B2C supplies, for which payment is made through cheque or digital mode, subject to a ceiling of Rs100 per transaction, so as to incentivise promotion of digital payment.

The council has recommended the setting up of a group of ministers from state governments to look into the proposal and make recommendations, before the next Council meeting, keeping in mind the views expressed in GST Council.

The Council also decided to impose a `Sugar Cess’ over and above the 5 per cent GST and reduction in GST rate on ethanol in view of the record production of sugar in the current sugar season, and consequent depressed sugar prices and build-up of sugarcane arrears.

The council also recommended the setting up of a group of ministers from state governments to look into the proposal and make recommendations, within two weeks, keeping in mind the views expressed in GST Council in this regard.