To reduce the cascading of taxes arising on account of non-inclusion of petrol, diesel, ATF, natural gas and crude oil in the Goods and Services Tax (GST) and to incentivise investments in the exploration and production (E&P), and downstream sector, the Ministry of Finance on Wednesday stated that notifications to give effect to the proposals would be issued shortly.
In the 22nd meeting of the GST Council held on October 6, it was proposed that offshore works contract services and associated services relating to oil and gas exploration and production in the offshore areas beyond 12 nautical miles would attract 12 percent GST. Further, it was stated that transportation of natural gas through pipeline would attract a GST of 5 percent without input tax credits (ITC) or 12 percent with full ITC.
Also, import of rigs and ancillary goods imported under lease would be exempted from IGST, subject to payment of appropriate IGST on the supply/import of such lease service and fulfillment of other specified conditions. GST rate on bunker fuel was to be reduced to 5 percent, both for foreign going vessels and coastal vessels.
The GST Council in its earlier meeting raised the composition scheme threshold for businesses to Rs. 1 crore, which will allow them to pay a tax of 1 per cent to 5 per cent, without having to deal with a three-stage filing process.
In compliance with the latest recommendations by the council, small and medium-sized enterprises (SMEs) with an annual turnover of Rs. 1.5 crore will be allowed to file their returns quarterly instead of filing it every month.
The 23rd meeting of the GST Council is scheduled to take place on November 9 in Guwahati.