Panel Suggested to Put GST in MRP – A Mandatory Call

New Delhi: Bringing up the most criticized GST matter, The Group of Ministers (GoM), headed by Assam finance Minister Himanta Biswa Sharma called the GST Council to bring out a new amendment in the GST law to ease up fiscal burden on small and medium enterprises (SMEs). They narrated various suggestions to present GST law and recommended the council to shift the GST burden to MRP of goods and services. Describing the statement they said ‘Maximum Retail Price of goods must include the Goods and Service Tax as an inherited component as this would save consumers from unreported tax additions of retailers’.

However, the sources added that this rule must be applicable to establishments like eateries, malls and restaurants and food plazas which sell packed goods such as bottled beverages having an MRP, but GST on them is charged over and above MRP. It was also recommended that businesses while uploading the invoices would be able to distinguish the component of GST in MRP  while filing returns to government.

‘We have suggested that when businesses issue invoice to customers in which the GST would be a part of MRP. While the bifurcation in sale price and tax collected can be shown individually in invoice while paying taxes to government’ The PTI affirmed the suggestion. The GST council, chaired by Union Finance Minister Arun Jaitley and his counterparts conceived the suggestion saying that they would measure out the recommendations for GST in MRP made by GoM and would certainly act on it.

Presently the businesses with turnover up to Rs 1.5 Crore are allowed to pay taxes and file their returns quarterly. The GoM further stated in recommendations to slash the low slab to 1% for manufacturers and restaurants and to ease GST filing norms for traders evenly.

In a round of ministry recommendations, it was also suggested that:

  • Manufacturers and Restaurants with turnover up to Rs 1 crore should be made liable to file only 2% and 5% GST under the composition scheme respectively and keeping a standing rate of 1% rate for traders.
  • Distinguishing AC and Non AC restaurants, those not covered in composition scheme can be taxed at 12% with input credit.
  • Other than having a strict slab, the GST tax distinction can be made on room tariff basis like if a hotel has a room tariff of Rs 7500 should get attracted to a uniform rate of 18% rather keeping a separate category of 5-star hotels for them.

Note : As per 23rd GST Council Metting, The council said the restaurants did not pass on the input tax credit (ITC) to customers and so the ITC facility is being withdrawn and a uniform five per cent tax is levied on all restaurants without the distinction of AC or non-AC wef 15th November, 2017

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