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Press Release

Date: July 21, 2018
Subject: GST Council Recommends Major Amendments to GST Laws to Ease Compliance and Expand Taxpayer Relief
Description:

The GST Council, in its 28th meeting held in New Delhi on 21 July 2018, recommended a comprehensive set of amendments to the CGST Act, IGST Act, UTGST Act, and the GST (Compensation to States) Act with the objective of simplifying compliance, widening input tax credit availability, and providing greater operational flexibility to taxpayers. Key recommendations included raising the turnover limit for the Composition Scheme from Rs. 1 crore to Rs. 1.5 crore and allowing composition dealers to supply services up to 10 percent of turnover or Rs. 5 lakh, whichever is higher. The Council proposed restricting reverse charge liability on purchases from unregistered suppliers to only specified goods and notified classes of taxpayers, and increasing the GST registration threshold to Rs. 20 lakh for certain special category States. Several measures were approved to ease registration and compliance, such as permitting multiple registrations within a State, suspending registration during cancellation proceedings, and limiting mandatory registration for e-commerce operators to those required to collect tax at source. To provide clarity on taxability, high-sea sales, in-bond sales, and certain offshore transactions were proposed to be treated as “no supply.” The scope of input tax credit was significantly expanded to include specified Schedule III transactions, certain motor vehicles, insurance and maintenance services, and statutory employee welfare obligations, while removing interest liability on ITC reversal due to delayed supplier payments. Additional reforms covered simplified credit and debit notes, caps on pre-deposit amounts for appeals, extended timelines for job work, export treatment for services paid in Indian rupees where permitted by RBI, rationalisation of ITC utilisation order, and strengthened recovery provisions across States. These recommendations were to be placed before Parliament and State legislatures for enactment, reflecting the Council’s intent to make GST more taxpayer-friendly and administratively efficient.

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