2nd GST council meeting-Setting the foundation of GST
The second GST council meeting held on 30th September 2016 took several significant decisions related to registration & rules. The main purpose of this meeting was to approve the draft rules released for GST in relation to Registration, Return, Refund, Payment, Invoices and Debit & Credit notes.
The decisions / discussions done in today’s meeting are:
- In case of area based exemptions available to north east and hilly states, exemption would be provided by way of refund and not by the present scheme of giving an ab-initio exemption.
- Tax would be levied on all such exempted entities under GST. The centre or the states would first collect the tax and then would reimburse tax to such entities.
- States had to agree with some decisions that were taken by Central Government. It is still not clear whether an entity have to claim refund for the exempted amount or refund would be automatically processed by the Goods and Services Network.
- Work is under process on decisions to be made for specific exemptions which would continue to be provided to business entities/ goods/ services.
- Although it was decided in the last meeting that, service tax payers will be controlled by the centre, the states did not whole heartedly accept the decision, as this would have given control on works contract, software contracts, restaurant supplies, etc. also to the centre. Now CBEC would be working on it to bring a solution which shall be acceptable by all.
- The draft rules for registration, payment, refund, invoices and debit/credit notes were given an approval.