Home >News >India >Mobile phones to cost more as GST rate hiked to 18%

The 39th GST Council headed by Finance Minister Nirmala Sitharaman took a bevy of decisions on Saturday, including raising GST on mobile phones, specified parts to 18% from the existing 12%. The Goods and Services Tax (GST) on handmade, machine-made matchsticks has been rationalised to 12% while GST on MRO (maintenance repair overhaul) services of aircraft slashed to 5% from 18%. All rate related changes will come into effect on 1 April.

Delayed GST payment will attract interest on net tax liability from 1 July. Small businesses got some relief from the latest GST Council meeting with the deadline for GSTR-9C being relaxed. For those with annual turnover below 5 crore, the due date for filing annual return and reconciliation statement for FY19 was extended to 30 June, 2020. The Council also waived late fee for delayed filing of annual returns for FY18, FY19 by entities with turnover of less than 2 crore. The FM said that 78,000 crore has been collected as compensation cess. The total compensation related to stats is over 1.2 lakh crore, she said.

A better GSTN system will be ensured by Infosys by July 2020, said Sitharaman. Infosys chairman Nandan Nilekani would attend next three meetings of the GST Council and update the Council on status of implementation of the decisions taken by the Council and assist in taking appropriate decisions on technology related issues, said Sitharaman. It may be recalled that Nilekani asked for time until January 2021 to ensure smooth functioning of GST’s IT systems.

GST Council will ask Infosys to deploy more skilled manpower, increase capacity of hardware, said the Finance Minister. Recently, the finance ministry has flagged 17 'areas of dissatisfaction' with Infosys-designed GST Network, including transition issues for taxpayers in Jammu and Kashmir, Aadhaar verification and lack of scalability of server.

The meet on Saturday sought to correct the anomalies in the inverted duty structure, ease of doing business and lower compliance burden. Inverted duty refers to tax rates on inputs being higher than those levied on finished products. This results in higher input credit claims by goods besides several administrative and compliance issues. However, decision on GST rates for footwear, fertilisers and man-made fibres has been deferred for the next meeting.

Goods and Services Tax collections in the month of February this year were at 1,05,366 crore.

According to the Union Finance Ministry, the GST revenues during the month of February 2020 from domestic transactions have shown a growth of 12 per cent over the revenue during February last year.

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