GST Council to discuss rate revision of agri services; also iron out e-way bill issues on Saturday

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The all-powerful Goods and Services Tax (GST) Council will take up representations from the industry regarding revision of rates, while focusing primarily on changing tax rate of agriculture and agricultural services such as warehousing and garment job works.

The Council, headed by Finance Minister Arun Jaitley, will meet on Saturday to take a stock of implementation the country’s biggest tax reform that was rolled out on July 1.

It will also iron out crucial issues related to electronic-way (e-way) bill, finalise a mechanism to operationalise anti-profiteering clause and revisit the demands of the textile as well as other sectors, a senior government official told Moneycontrol.

Sources said that rates of items such as ribbons and gas stove may also be taken up for discussion, with agriculture being the main focus of the government.

Finalising the contours of the e-way bill rules will also be a priority on Saturday. In the June 18 meeting of the Council, Jaitley had said that there will be further deliberations on e-way bill rules. “Final rules will be framed after consensus,” he had said. Till then an alternate rule has been approved authorising existing system in the states to continue.

Under draft GST rules, ferrying worth more than Rs 50,000 within or outside a state will require securing an e-way bill by prior online registration of the consignment. “The limit of Rs 50,000 is likely to be raised,” the official said.

To generate an e-way bill, the supplier and transporter will have to upload details on the GSTN portal, after which a unique e-way bill number (EBN) will be made available to the supplier, the recipient and the transporter on the common portal. Depending on the distance covered or needed to transport the good, the EBN will remain valid for one to 15 days—one day for distances upto 100 kms and 15 day days for distances of more than 1,000 km.

The Centre and the State is divided on certain parameters related to the e-way bill. For instance, states are of the opinion that the bill should be obtained for intra-state movement of goods, while Centre feels that it should be generated only for inter-state movement, the official explained, adding that the Council is most likely to debate on these issues.

Centre also feels that exempted items under GST, especially food should be kept out of the e-way bill system, the official said.

Sources also said that the demand of the textile sector may also be looked at as traders in Gujarat were on a strike for close to a month demanding roll-back of the 5 percent rate fixed by the Council in June. The industry is still pinning hope on a zero percent tax on fabrics.

However, last month Finance Minister Arun Jaitley said that “Nil GST on fabrics will break the input tax credit chain and then the garments/made ups manufacturers will not be able to get the credit of tax on previous stages”.

“Generally, the GST rates are equal or lower than the pre-GST tax incidence. And therefore, the price of fabrics is not likely to go up,” Jaitley had said.

While GST rate for certain items may be revised, the government has time and again reiterated that change in rate is not something that the Council in keen on, until something has been left out or there has been an error in judgement by the fitment committee.

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