No more arrest for GST offences for amounts less than Rs 2 cr

New Delhi: In a major relief to small businesses and traders the Goods and Services Tax (GST) Council has decided to do away with arrest for cases involving amounts less than Rs 2 crore.

At present, offenders are liable for prosecution in cases involving amounts above Rs 1 crore.

Considering the anger among the trading community over the harsh provisions of the GST Act, the Council has recommended that arrest should be made only in cases involving amounts above Rs 2 crore.

However, the provison that an offender could be arrested for forged invoices for amounts above Rs 1 crore, has been retained.

The recommendation to remove violations of law involving amounts up to Rs 2 crore from the list of criminal offences is part of the efforts to extend support to the trading community.

Violations such as preventing a public servant from carrying out his duty, intentional destruction of evidence, and refusal to provide information have been removed from the purview of criminal offences.

The amount payable for compounding of offences, which was 50% to 150% of the tax payable, has been reduced to 25% to 100% of the tax. The Centre will incorporate the necessary amendments in this regard in the Finance Bill. The measure will come into force after the States also amend their laws.

No decision on revision of taxes
There was no decision on revision of taxes at the Council meeting that was conducted virtually.

Owing to the shortage of time, only 8 of the 15 items on the agenda were taken up for discussion. The meeting also did not consider reports of the Cabinet sub-committees on issues such as the GST Appellate Tribunal.

The tax structure for online gaming and casinos too did not find a place in the discussion. These issues will be considered in the next meeting.

Major changes in a nutshell
22% cess will continue to be applicable to sports utility vehicles (SUVs). More clarity was brought to the definition. The engine capacity should be above 1,500 cc, length over 4,000 mm, and ground clearance above 170 mm.

If even one of these conditions is not met, then the cess will be applicable at a lesser rate. More clarity would also be made in the definition of multi utility vehicles (MUVs) later.

* GST on bran and other byproducts of cereals that are added to cattle feed have been exempted from GST. The prevailing rate of GST on these products is 5%. These products are not used much in Kerala for manufacturing cattle feed. The concession will lead to a reduction in the price of cattle feed in other States.

* No GST on rents for houses leased out for personal use.

* Recommendation to amend the Union GST legislation in order to enable payment of tax refunds in special cases for persons who do not have GST registration.

* Since the amounts paid by the Centre to banks for promoting the use of RuPay debit card and BHIM UPI transactions are in the nature of subsidies, GST will not be applicable to them.

* No-claim bonuses given by insurance companies will not attract GST.

Online sale: GST registration not mandatory for small business

From October 1 next, GST registration will not be mandatory for enterprises with an annual turnover of less than Rs 40 lakh for conducting online sales.

Small businesses can sell their products and services through e-commerce platforms in their own States. Though until now GST registration was not necessary for offline businesses with a turnover below Rs. 40 lakh, it was mandatory for online enterprises.

With this, small enterprises such as boutiques and units making handicrafts will get access to the online market without having to deal with the complexity of the GST.

Aadhaar biometrics to prevent fake registration

A system based on the Aadhaar biometrics is being unveiled to prevent fake registrations.

The pilot project under this will be launched in Gujarat. In addition, a verification system based on the one-time password (OTP) will be put in place to prevent the misuse of the Permanent Account Number.