GST: Threshold for 28% tax on AC hotels raised
In a major relief to the hospitality industry, the GST Council on Saturday raised threshold for imposition of 28 per cent tax rate on AC hotels from Rs 5,000 to Rs 7,500.
That means 18 per cent tax rate will be levied on bills of Rs 2,500- 7,500.
The 28 per cent rate set by the Council is a sharp hike from the current tax incidence of nearly 19 per cent on the industry. However, the higher threshold will provide relief to the sector.
The Council, which met here, also decided to tax lotteries in two segments — with state-run ones attracting 12 per cent GST and the state-authorised 28 per cent.
Additionally, it cleared six rules, including anti-profiteering. "I hope we are not compelled to use it (anti-profiteering)," finance minister Arun Jaitley said while briefing media on the outcome of GST Council’s meeting. Jaitley said further consultations would be held on e-way bills, till then an alternative or transient rule will prevail. The next meeting of the Council will be held on June 30.
On the implementation schedule of the new indirect tax regime, the finance ministry said, "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.”
IT preparedness has been discussed at length and 65.6 lakh have taken provisional registration, Jaitley said.
The official launch of the GST is slated for mid-night of June 30 and July 1.
The Council also relaxed return filing rules for businesses for the first two months of the rollout of the new indirect tax regime even as it stuck to the July 1 launch date.
The industry has been pushing for deferment of the tax implementation.
According to the revised return filing timeline decided by the Council for July, the sale returns will have to be filed by September 5 instead of August 10.
Companies will have to file sale invoice for August with the GST Network by September 20, instead of September 10 as decided earlier. “To obviate any lack of preparedness, a slight relaxation of time for two months — July-August — has been given. From September, there will be strict adherence to time,” he said.
When brought to his notice that the tax department and states have received complaints that those who have booked flats and made part payment are being asked to make full payment before July 1, 2017, or to face higher tax incidence for payment made thereafter, Jaitley said “this is wrong” and real estate developers should pass on the benefits of input tax credit to buyers or else face action under anti-profiteering rules.
“We have requested the ministry of housing and urban poverty alleviation (HUPA) secretary to hold meetings with real estate developers associations and make them understand,” revenue secretary Hasmukh Adhia told reporters here. According to Rajeev Dimri, leader, indirect tax, BMR & Associates LLP, the GST council has offered relaxation in the timelines for filing the invoice-wise details in GSTR1 for the months of July and August. Such details can be filed up to Sept 5, 2017 for July and Sept 20, 2017 for August. “This measure should significantly help in assuaging the concerns of inadequate readiness of GSTN being faced by the industry,”he said.