A panel comprising government officials have floated a draft amendment, proposing certain compliance-related changes to the current Goods and Services Tax (GST) regime. It may be noted that the panel has recommended changes in at least 46 categories of amendments to further simplify the indirect taxation system that came into effect last year. According to a PTI report, if the draft changes are amended, employers in companies will be able to leverage the fresh changes to claim input tax credit on a slew of facilities like food, transport, insurance that is provided to employees.
As the government had earlier claimed, it would be bringing in more entities with the fresh draft to help citizens. It may be noted that there are several amendments that have been planned to streamline the regime – omission of liability to pay tax on reverse charge has been touted to be one of the biggest changes; the new return filing procedures are expected to make compliance easier and would allow more service providers to opt for the composition scheme. The draft notification is open for stakeholder and public comments till July 15.
Once the draft amendments get a final nod from the revenue department, they will be placed before the GST Council for approval when they meet on July 21. Following that, the recommendations will be placed before the Parliament and state legislatures during the Monsoon Session for amending them.
“Provided that the input tax credit in respect of such goods or services or both shall be available, where the provision of such goods or services or both is obligatory for an employer to provide to its employees under any law for the time being in force,” the draft amendments said. However, it will not apply in for other services such as membership to health and fitness centres, clubs, and other transport benefits offered by the employer.
Speaking to the news agency on the matter, Abhishek Jain, Partner, EY, said, “With the proposed GST amendment to allow credits like rent-a-cab, insurance, etc when mandated under any law, the pool of credits for businesses like BPO’s, factories, etc may witness an increase. However, explicit denial of ITC for insurance, repair, maintenance, etc of vehicles may entail higher tax costs on car-related expenses for businesses.”
Under the fresh amendments e-commerce companies are also not required to seek registration under GST if their annual turnover is less than Rs 20 lakh, the report added. Other than that, they are not required to collect tax at source as per Section 52.
The government said that the measures are aimed at making the regime taxpayer-friendly, with an aim to help small e-commerce firms and most other small-scale employers. The government, on July 1 celebrated GST Day, claiming that it has helped in significant growth and exuded confidence that it would do be able to streamline it to make it an easier indirect taxation system.
Source: Times Now News