The Goods and Services Tax (GST) Council on Thursday decided to provide a three-year tax exemption for viability gap funding given under the regional air connectivity scheme, and reduced tax rate on 29 items and 54 categories of services. The rates will be applicable from January 25.
The council decided to give tax impetus to the regional air connectivity by providing 3-year GST exemption to viability gap funding under the UDAN (Ude Desh ka Aam Naagrik) scheme. UDAN seeks to connect unserved and under-served airports as well as make flying more affordable. The participating airlines are eligible for Viability Gap Funding (VGF), subject to certain conditions. These include extension of “GST exemption on VGF for three years from the date of commencement of regional airports from the present period of one year,” said the release.
The Civil Aviation Ministry contributes 80 per cent of the VGF amount, the rest comes from the State Governments concerned and in the case of N-E States and UTs, the sharing ratio is 90:10.
Besides, the council is also considered easing of return filing process but deferred the decision. The council may also consider bringing petroleum and other exempt items within the purview of GST in the next meeting.
The panel, headed by Finance Minister Arun Jaitley and comprising representatives of all States, at its 25th meeting also considered simplification of return filing process, but it has not yet finalised a decision.
However, Jaitley said while briefing the reporters that the matter though was discussed and Nandan Nilekani gave a detailed presentation on the matter. “The new process would be finalised in the next meeting of the GST Council after a written formulation is circulated to the states. The date of the next meeting of the Council has not yet been decided,” he said.
Jaitley said the Government is well ahead of target on direct tax collections. “Provision of carrying e-way bill, when moving goods between States, will be implemented from February 1 and 15 states will implement the intra-state e-way bill,” Jaitley said.
“Next meeting of the Council may consider bringing petroleum and other exempt items within the purview of GST,” he said.
In a bid to ease compliance burden, the Council veered around to the idea of registered entities continuing to file the return in GSTR 3B Form while moving to a system where supplier invoice captures details of the transaction.
Jaitley, however, said the GST provision requiring transporters to carry an electronic waybill or e-way bill, when moving goods of over Rs 50,000 in value between States, will be implemented from February 1 to check rampant tax evasion.
“As many as 15 States have decided to implement the provision for intra-State movements as well,” he added.
After implementation of the historic tax regime from July 1, 2017, the requirement of carrying e-way bill was postponed pending IT network readiness. Once the e-way bill system is implemented, tax avoidance will become extremely difficult as the Government will have details of all goods above the value of Rs 50,000 moved and can spot the mismatch if either the supplier or the purchaser does not file tax returns.