Electronic invoices (e-invoices) system, an extension to National Anti-profiteering Authority (NAA), the revenue position of states and the new return filing system will be discussed in the 35th meeting of the Goods and Services Tax (GST) Council slated for June 21.
Levy of GST on extra-neutral alcohol (ENA) used in manufacturing liquor for human consumption is also expected to be discussed in the meeting of the Council, the first one to be chaired under Finance Minister Nirmala Sitharaman.
The GST Council was earlier scheduled to meet on June 20 but has now been deferred to June 21.
An extension for NAA, before its two-year sunset clause, is being seen necessary as there are many pending cases. The anti-profiteering rules are in relation to Section 171 of the CGST Act, which provides that any reduction in rate of tax on any supply of goods or services, or the benefit of input tax credit shall be passed on to the recipient (consumer) by way of a commensurate reduction in prices. The NAA’s term commenced on November 30, 2017, after B N Sharma assumed charge as its Chairman.
The inclusion of ENA under GST was discussed in Council’s meetings earlier as well, after which the legal opinion was sought from AG. The AG is then learnt to have opined that given that ENA is not fit for human consumption, bringing it under GST won’t require a Constitutional amendment. Currently, ENA for potable alcohol is not taxed by either the Centre or state governments.
ENA used for industrial alcohol is, however, taxed at 18 per cent and its raw material sugarcane molasses is charged the peak GST rate of 28 per cent. Inclusion of ENA under GST ambit will help manufacturers to claim input tax credit. ENA is a derivative of sugarcane molasses (95 per cent of high-purity ethyl alcohol) and is not an alcoholic liquor for human consumption. The GST Council will also take a final decision on the turnover threshold for issuance of e-invoice for B2B sales after consultation with the states. The Centre is in favour of fixing the turnover threshold for e-invoices for B2B sales at Rs 50 crore. The government is planning to roll out e-invoice system by September.
The GST Council has already set up two sub-groups to look into the policy and technical aspects, such as turnover threshold and mode of generation, for e-invoice generation by businesses. Depending on the success of the project in the B2B segment, the revenue department would look at extending it to business-to-consumer (B2C) sales, especially in sectors where the probability of tax evasion is high.