Goods and services tax has been a massive change for the Indian economy. Since its rollout on 1 July 2017, GST has seen both legal and technical amendments to minimize the challenges faced by taxpayers, give a boost to various struggling sectors and industries, check tax evasion and increase the ease of doing business in India.
To track the movement of goods and check tax evasion after the removal of check-posts on state borders, the GST Council decided to implement the e-way bill system throughout the country from 1 February 2018. However, technological glitches led to disruption in trade and e-waybill implementation was postponed after one day. No timeline has been prescribed yet for the reintroduction of e-waybills.
Another major step is the rationalization of rates for real estate. The GST Council cut the GST rate from 12% to 8% per cent for homes purchased using the credit-linked subsidy scheme under the Pradhan Mantri Awas Yojna, as well as low-cost homes up to a carpet area of 60 square metres. This will give a boost to the real estate market, promote the government goal of housing of all by 2022 and grant relief to first-time home buyers.
In another welcome step the states of Assam and Jammu & Kashmir will reimburse state GST (SGST) after utilization of the input tax credit of available SGST and integrated GST (IGST). The Assam government has extended the benefits to new and expanding units, which will put additional pressure on other states to offer similar benefits.
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L Badri Narayanan is a partner and Tushar Aggarwal is a joint partner at Lakshmikumaran & Sridharan.
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