An 18% tax on mobile phones can be reduced by the Goods and Services Tax (GST) Council on mobile phones, as per the meeting held in September.
The proposed rate reduction has resulted from sluggish sales in mobile handsets.
After 374 days, the meeting of the council is held. The upcoming session is not similar to the previous meeting, where discussion on GST rate rationalisation was held; rather, it is anticipated to focus on easing compliance for businesses.
GST compliance reforms might be discussed in the meeting
Beyond the mobile phone tax proposal, the council is anticipated to analyse various problems of GST compliance and ITC.
The main issue is the inverted duty structure, where the GST paid on inputs is more than the tax levied on the final product.
The council can consider measures to safeguard genuine buyers who lose Input Tax Credit (ITC) when suppliers do not file their taxes.
Another proposal includes automation in GST administration. Refund processing could proceed towards a risk-based automated system via GSTN and e-invoicing data.
Compensation Cess also on agenda
The accumulated compensation cess may need attention.
The 57th GST Council meeting on September 12 can consider the mobile phone GST rate and wider revisions aimed at easing compliance. It enhances working capital and lessens recurring tax issues.
