GCCI Submits GST Reform Proposals to CM for GST Council Meeting

The Goa Chamber of Commerce and Industry (GCCI) handed over a GST proposal to Dr. Pramod Sawant Hon. Chief Minister of Goa who is recently nominated as Goa’s representative on the GST Council. The meeting will be held on 22 nd June 2024 .
The proposal, aimed at refining and improving the GST framework, encompasses macro- level reforms, new registration procedures, and sector-specific suggestions to alleviate current challenges and foster economic growth. The key suggestions are as follows:

Macro Level Reforms – Indirect Taxes

1. Rate Rationalisation for Simplifying GST: Proposes rationalising GST rates to reduce tax burden, correct inverted duty structures, and avoid cascading effects of taxes, enhancing economic growth .GCCI has suggested to minimise multiple GST Tax rates to avoid classification disputes.
2. Introduction of GST Amnesty Scheme & Removal of Time Limits for Availing Input Tax Credit: Recommends amending Section 16(4) to extend the time limit for availing ITC and suggests an amnesty scheme to reduce litigation and financial burden on MSMEs.
3. Incentivising Genuine and Compliant GST Taxpayers: Suggests benefits for compliant taxpayers such as faster processing of refunds, consideration of past compliance before issuing notices, and quicker processing of new branch registrations.
4. Implementation of Facility to Revise GST Returns: Advocates for the ability to revise GST returns to rectify unintentional mistakes and reduce litigation.

Suggestions Relating to New Registrations

5. Standardisation of Documents for GST Registration: Proposes a standard SOP for GST registration and issuing welcome letters to new taxpayers to ensure seamless registration and verification.
6. Facility for One Window Registration for New Taxpayers: Suggests a unified registration process for PAN, TAN, CIN, and GST to streamline the registration process.

Suggestions Relating to Tourism Sector

7. Rationalise GST Rate for Hotel Accommodation to a Single Rate of 12%: Aims to boost the tourism sector by reducing GST on all accommodation services to 12%.
8. Seamless GST Credit for Hotel Stay in Other than Registered States: Proposes amending Section 12(3)(a) and (b) of the IGST Act to allow hotels to charge IGST, facilitating seamless credit availability for businesses.
9. Option to Charge 12 % GST with ITC Benefits for Restaurants

Suggestions Relating to Real Estate Sector

10. Allowing GST Input Tax Credit to Real Estate Sector: Recommends allowing ITC to reduce tax burden on developers and lower end-user prices.
11. Eligibility of Input Tax Credit on Construction Items for Hotels/Home-Stays/Warehousing Facilities: Suggests revising policies to allow ITC for construction services used in revenue-generating assets like hotels and warehousing facilities.

Suggestions Relating to Shipbuilding Industry

12. Inverted Duty Structure for Shipbuilding Industry: Recommends solutions to reduce working capital blockage due to inverted duty structures, such as concessional rates on steel procurement.

Suggestions Relating to Export Sector

13. Allowing Refund of GST Paid on Capital Goods for Zero-Rated Supply: Proposes amending Section 54 and Rule 89(4) to allow refund of accumulated ITC on capital goods for exporters.

Other Changes

14. Redesign the GST Annual Returns & Reconciliations under GSTR 9 & 9C: Suggests redesigning forms GSTR 9 and 9C to provide clearer disclosures and reduce unnecessary show cause notices.
15. Relaxation in Interest Payable on Reversal of ITC: Proposes amending Section 16(2) and Rule 37 to make interest payable only after the expiry of 180 days from the supplier’s invoice date.
16. Clarification on Eligibility of ITC on Promotional Goods: Recommends issuing a circular to clarify ITC eligibility on promotional goods given in the course of business to reduce litigation.