Many big decisions have been taken for businessmen and taxpayers in the 57th GST Council meeting. According to sources, the Council has approved proposals related to abolishing arrest powers of GST officers, giving input tax credit (ITC) on many business-related expenses and reducing small tax disputes.
Apart from this, important decisions have also been taken related to delivery service, retreaded tractor tires and small tax matters. These changes are expected to provide relief to FMCG, pharma, telecom, infrastructure, delivery and corporate sectors.
The revenge of not being able to arrest directly is over.
According to sources, the GST Council has approved the proposal to withdraw the power of arrest from GST officers.
This would mean that tax officials will not be able to take direct arrest action in general GST disputes. In serious criminal cases and cases like deliberate tax evasion, the judicial process will be adopted.
The agenda of the meeting already included a proposal to change the provision of arrest under Section 69 of the CGST Act and to limit criminal action except in serious cases.
ITC will be available on employee health and life insurance
A big decision for companies has been taken regarding health and life insurance of employees.
According to sources, companies have been allowed to take ITC of GST paid on group health and life insurance taken for employees.
This may reduce the effective cost of companies on such expenditure.
ITC also on telecom tower and pipeline outside the factory
The GST Council has also approved clearing the way for ITC on telecom towers and pipelines outside the factory premises.
Due to this, businesses related to pipeline, refining, petrochemical, gas distribution and infrastructure along with telecom can benefit. There is huge capital expenditure on such assets in these areas.
GST on delivery service reduced from 18% to 5%
There is news of relief for the delivery sector also. According to sources, approval has been given to reduce GST on the services of riders providing unregistered delivery services from 18% to 5%.
This can reduce the tax burden on small delivery service providers and delivery businesses related to e-commerce.
Clear the way for ITC on outdoor catering
Another important change for companies is regarding outdoor catering. According to sources, eligible businessmen will get the benefit of ITC on GST related to outdoor catering.
This is expected to reduce the costs of companies regarding such expenses.
GST on retreaded tractor tires now 5%
Relief has also been given for the agricultural sector. According to sources, approval has been given to reduce GST on retreaded tractor tires from 18% to 5%.
This means that retreaded tires which make old tractor tires reusable will now attract 5% GST.
Big benefit to FMCG and pharma companies
The GST Council has also approved changes related to ITC on free samples and goods which are subject to mandatory destruction under the law.
According to sources, companies will get the benefit of ITC on such free samples on which GST has been paid and such goods which are required to be destroyed as per law after expiry.
FMCG and pharmaceutical companies can benefit the most from this. This change holds special importance for pharma companies, because destroying drug samples and expired medicines is part of the business process.
Show-cause notice will not come in cases of less than Rs 10,000
A big decision has also been taken to reduce small tax disputes. According to sources, the GST Council has approved setting the minimum limit of Rs 10,000.
That means, show-cause notice will not be sent in cases of tax demand of less than Rs 10,000.
Its purpose is to save time and resources of both businessmen and the tax department in small tax disputes and small amount cases.
Source: ndtv.in
