GST Council may ease rules on e-way bills today

New Delhi: The GST Council is set to make it easier for businesses and traders to transport goods in the new indirect tax regime by easing the requirement of electronic permits needed for it.

A GST Council meeting on Saturday will consider a proposal to exempt goods consignments of up to Rs1 lakh in value from the requirement of obtaining permits called e-way bills, according to a person with knowledge of the matter, who spoke on condition of anonymity.

This is a major relaxation in the threshold from the level of Rs50,000 proposed in the draft e-way bill rules the GST Council had circulated earlier among states.

The revision is being considered in view of suggestions received from states, traders and transporters, said the person cited above.

However, those shipping goods below the revised threshold may still voluntarily secure e-way bills if they wish.

E-way bills, when implemented, will help central and state tax authorities to keep an eye on factory output and inter-state commerce and provide data relating to consumption of goods, which is useful in policy making.

State governments and Union territories have already dismantled the border checkposts operated by indirect tax administrations, reducing the time needed for the movement of goods across states.

E-way bill rules and the finer aspects of implementing the anti-profiteering mechanism are the two remaining legislative tasks before the GST Council, besides deciding on the representations received from the industry on tax rates.

Finance minister Arun Jaitley had on Tuesday said in Parliament that the council will regularly meet every month to “see where the shoe pinches”.

The federal tax body chaired by Jaitley, which has representatives from states and Union territories with their own legislatures, is expected to make changes in the tax rates of some commodities on Saturday.

Pratik Jain, partner and leader of the indirect tax practice at PwC India, said services are at present not included in the composition scheme meant to reduce the compliance burden of small traders, manufacturers and restaurants. Under this scheme, these entities with total annual sales of Rs75 lakh could pay 0.5-2.5% GST on their total sales without tax credits.

“The GST Council could consider including small service providers under the composition scheme,” said Jain.

The rollout of GST so far has not seen any large disruption but the robustness of the technology infrastructure supporting the tax reform is expected to be tested in September, when businesses and traders will file their monthly return for July.

Finance minister Jaitley said on Tuesday that 7.2 million of the 8 million indirect tax assessees under the earlier tax system have migrated to GST, while 1.3 million new taxpayers have also signed up under the new indirect tax system, indicating the tax base is set to widen significantly by the end of the year.

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