A composition scheme for services, deferment of the e-way bill till 2019 and abolition of the reverse-charge mechanism are some of the key measures proposed by the committee in its report submitted to finance secretary Hasmukh Adhia on Tuesday.
The group has also proposed simplification of return forms and exclusion of exempted goods from aggregate turnover, a person aware of the development told ET. Other suggestions include no interest charges on late payments and input tax credit for building and office infrastructure. The panel also suggested allowing those availing of the composition scheme to engage in inter-state sales.
Under the composition scheme, those with turnover up to Rs 1 crore can opt for a flat tax without the need to maintain elaborate documentation and file returns. A higher Rs 1.5 crore limit has been approved by the GST Council, but that can be implemented only after a change in the law.
The government is eyeing further rationalisation of the GST framework, especially rules and procedures, as it looks to make the new tax more easy for businesses to comply with. The e-way bill refers to a document that’s required for the movement of goods worth above a certain threshold. The reverse-charge mechanism relates to the recipient of goods and services paying GST rather than the producer.
Traders and small businesses across the country have complained about provisions under the new tax as well as the compliance burden it imposes on them. GST replaced multiple state and central taxes and cesses and is aimed at turning India into a common market by removing barriers, thus improving efficiency, reducing costs and boosting growth.
The business community in Gujarat, which goes to the polls this month, has been at the forefront of protests against the new tax regime, especially with regard to compliance. The proposed procedural overhaul is expected to address these issues.
The GST Council, the apex decision-making body, had set up the advisory group comprising industry representatives to look at issues and suggest steps to make compliance under the new tax regime less onerous.
The group was specifically set up to look at central, state and integrated GST laws and problems faced by stakeholders. It had been asked to submit its report by November 30. The proposals will be taken up by the review committee set up to examine the GST law and will give its recommendations by December end. These will then be considered by the GST Council when it meets next in January.
The council has already taken several measures to address issues raised by industry. It slashed tax rates on 178 goods from 28% to 18% at its November meeting.
It also raised the turnover threshold for the composition scheme to Rs 1 crore from Rs 75 lakh and extended simplified form 3B for the whole financial year.