The Goods and Services Tax (GST) Council on Saturday has increased the tax rate on mobile phones and specified parts to 18 percent. Currently, mobile phones attract a GST rate of 12 percent, while its inputs are taxed at 18 percent.
The Council, chaired by union finance minister Nirmala Sitharaman, has also given relief to domestic maintenance, repair and overhaul (MRO) services, by slashing the rate to 5 percent with a full input tax credit (ITC).
Earlier, GST Council nominated fitment committee had proposed to provide level playing field to domestic MRO industry vis-à-vis foreign MROs. The recommendation is to reduce GST on MRO services to 5 percent with full ITC and change Point of Supply (PoS) for B2B MRO services to the location of recipient. Currently, Indian MROs are paying 18 percent GST.
The Council also decided to waive the late fee for delayed filing of annual returns for FY2018, FY2019 by entities with a turnover of less than Rs 2 crore. The minister also said that interest will be levied on net tax liability from July 1 for delayed GST payments.
Sitharaman said the GST Council has asked Infosys to deploy more skilled manpower, increase the capacity of hardware of GST Network to ensure that the system is glitch-free. The council has asked Infosys, which has designed the GSTN, to provide a better groomed GSTN system by July 2020, she added.
With the current economic slowdown and impact of coronavirus, the Council deferred the proposal of hike in rates on fertilizers, footwear and textiles, sources in the know told CNBC-TV18.
On problems in the GST Network, Infosys chairman Nandan Nilekani assured the Council that all glitches will be streamlined by January 2021 and proposed overhauling of the system with a specific step-wise roadmap. The proposal is subject to getting hardware from China, according to multiple people familiar with the development said.
First Published: IST