Budget 2019: GST processes to be simplified, automated GST refund to be implemented

New Delhi: Finance Minister Nirmala Sitharaman on Friday said that the Goods and Services Tax (GST) processes were being further simplified while adding that businesses with less than Rs 5 crore annual turnover will need to file quarterly GST return.

She also announced to increase special additional excise duty and road and infrastructure cess on petrol and diesel by one rupee each, hike in customs duty on gold and precious metals to 12.5 per cent and imposing nominal basic excise duty on tobacco products and crude.

The Union Budget also provides for exempting import of certain defence equipment from basic customs duty, reducing customs duty on certain raw materials and capital goods, and rationalisation of export duty on raw and semi-finished leather.

"The threshold exemption limit for a supplier of goods is proposed to be enhanced from Rs 20 lakh to an amount exceeding Rs 40 lakhs. Taxpayers having an annual turnover of less than Rs 5 crore shall file the quarterly return," she said.

She said that a fully automated GST refund module shall be implemented. "Multiple tax ledgers for a taxpayer shall be replaced by one," she said. The Budget proposes to move to an electronic invoice system wherein invoice details will be captured in a central system at the time of issuance.

"This will eventually be used to prefill the taxpayers' returns. There will be no need for a separate e-way bill. To be rolled out from January 2020, the electronic invoice system will significantly reduce the compliance burden," said Sitharaman.

The Finance Minister said that the landscape of indirect tax has changed significantly with the implementation of GST.

Terming it as a "monumental reform," Sitharaman said the GST regime has brought together the Centre and the States with the result 17 taxes and 13 cesses became one and multitude of rates instantly became four.

"Almost all commodities saw rate reduction. Tens of returns were replaced by one. Taxpayers' interface with tax departments got reduced. Border checks got eliminated. Goods started moving freely across states, which saved time and energy. The dream of 'One Nation, One Tax, One Market' was realised," she said.

She said that GST rates have been reduced significantly where relief of about Rs 92,000 crore per year has been given. "There is a need to unload the baggage and allow the business to move on, as more than Rs 3.75 lakh crore is blocked in litigations in service tax and excise," she said.

The budget proposes a dispute resolution-cum-amnesty scheme -- Sabka Vishwas Legacy Dispute Resolution Scheme, 2019 -- will allow quick closure of these litigations. The relief under the scheme varies from 40 per cent to 70 per cent of the tax dues for cases other than voluntary disclosure cases, depending on the amount of tax dues involved.

Describing 'Make in India' as a cherished goal, the Finance Minister proposed an increase in basic customs duty on certain items so as to provide domestic industry a level playing field. These items include PVC, cashew kernels, vinyl flooring, tiles, metal fittings, mountings for furniture, auto parts, certain kinds of synthetic rubbers, marble slabs, optical fibre cable, CCTV camera, IP camera, digital and network video recorders.

She also proposed to withdraw exemption from customs duty on certain electronic items which are now being manufactured in India.

To encourage domestic publishing and printing industry, 5 per cent customs duty will be imposed on imported books. To further promote domestic manufacturing, the budget proposes customs duty reductions on certain raw materials and capital goods.

These include certain inputs of CRGO sheets, amorphous alloy ribbon, ethylene dichloride, propylene oxide, cobalt matte, and naphtha, wool fibres, and input for manufacture of artificial kidney and disposable sterilised dialyzer, and fuels for nuclear power plants.

The Union Budget proposes to increase special additional excise duty and road and Infrastructure cess each by one rupee a litre on petrol and diesel.

"Crude prices have softened from their highs. This gives me a room to review excise duty and cess on petrol," she said.

Sitharaman also announced an increase in customs duty on gold and other precious metals from 10 per cent to 12.5 per cent. The Budget also proposes rationalisation of export duty on raw and semi-finished leather to provide relief to the sector.

Sitharaman said that tobacco products and crude attract National Calamity and Contingent duty which in certain cases is being contested on the ground that there is no basic excise duty on these items. To address this issue, the Budget proposes to impose a nominal basic excise duty on tobacco products and crude.

The Finance Minister proposed a few amendments to the Customs Act. She said: "Recent trends reveal that certain bogus entities are resorting to unfair practices to avail undue concessions and export incentives."

She announced that misuse of duty-free scrip and drawback facility involving more than

Rs 50 lakh rupees will be a cognizable and non-bailable offence.

Key POINTS

* Threshold for goods supplier to be enhanced from Rs 20 lakh to Rs 40 lakh.

* Hike in customs duty on certain items to promote 'Make in India'

* Increase of one rupee per litre each in excise duty and cess on petrol and diesel

* Customs duty on gold and other precious metals hiked from 10 pc to 12.5 pc

* Nominal basic excise duty on tobacco products and crude introduced