The government has recently proposed 46 new amendments to the GST law (central GST, state GST, and integrated GST) and revenue compensation law. The major amendment suggestions include credit availability to employers for GST paid on employee benefit expenses, a new return filing system, cancellation of GST registration, outright debit/credit note and separate registration for companies providing services in different business segments.
Among the 46 amendments recommended to the GST Council, one proposal is to implement a system where the employers would be able to claim input tax credits for GST paid on the cost of insurance, transport, food and other benefits and facilities provided to the company employees. Under the input credit scheme, taxpayers while paying GST on their product’s output (sales) revenue can get a discount (credit) equal to the tax paid on inputs (cost of goods/services purchased for manufacturing that product).
The government has asked related parties to provide their reactions on the proposal latest by July 15, 2018. The revenue department is working on finalising the proposal which will be then presented to the GST Council. After that, the proposal will be put to the Parliament and State Legislatures for the final discussion before the amendments could be made to the GST Law.
As per the amendment proposal, the input tax credit facility can be availed only by those employers who are liable under any law to provide their employees with facilities such as food, health services, transport or vehicle, and life insurance. These companies can them claim a credit of the GST paid on such service costs. Another amendment says that e-commerce companies that are operating in India and have an annual revenue of less than 20 lakh rs will not be required to register under GST and will not have to deduct a tax on source under the section 52 of the GST law.
While releasing the proposal, the government said that the reason behind these amendments is that, ‘they are in the favour of taxpayers.’
The proposal may be discussed in the 28th GST Council meeting which is expected to be held on July 21, 2018.
