The Central Board of Indirect Taxes and Customs (CBIC) has clarified that recent messages circulating on social media about new GST transition benefits are false and misleading. These messages, falsely attributed to the CBIC chairman, claim that benefits such as unutilised cess credit, input tax credit (ITC) on exempt supplies, and new price adjustment provisions will be applicable from September 22.
What are GST transition perks?
Transition benefits, often called “transition perks,” are provisions that help in adjusting to changes in the GST system. They include:
- Unutilised cess credit: Businesses can carry forward any unclaimed cess from old GST rates.
- ITC on exempt supplies: Firms may claim input tax credits for previously exempted goods or services.
- Price adjustment provisions: Allows adjustment of GST on supplies when rates change, reducing financial disruption.
CBIC issues clarification
In an official statement, CBIC emphasised that the claims in these messages are “factually incorrect and misleading.” The board urged the public, businesses, and industry stakeholders to rely solely on government-issued notifications, circulars, and FAQs for accurate information on GST reforms.
“Informal messages claiming to be from the Chairman CBIC are being widely circulated. Stakeholders should refer to official sources to understand the next-generation GST reforms accurately,” a CBIC spokesperson said.
Key GST updates
The clarification comes after the 56th GST Council meeting, chaired by Union Finance Minister Nirmala Sitharaman on September 3, approved a “next-gen” GST reform. The highlights of the reform include:
- Two-slab tax structure: GST rates are now 5 per cent and 18 per cent, replacing the earlier 12 per cent and 28 per cent rates.
- Reduced tax on essentials and medicines: GST on many household items and life-saving drugs has been cut.
- Luxury and sin goods: Products such as pan masala, tobacco, aerated drinks, luxury cars, yachts, and private aircraft will attract 40 per cent GST to ensure revenue balance.
- Simplified compliance: Registration, return filing, and refunds have been streamlined, reducing compliance costs, particularly for MSMEs and startups.
When will the changes take effect?
According to the Press Information Bureau (PIB), the revised GST rates for most goods and services, excluding certain tobacco products like cigarettes, zarda, unmanufactured tobacco, and beedi, will come into force on September 22. For the excluded items, the new rates will apply later, once outstanding compensation cess liabilities are settled.
Advice for taxpayers and businesses
Experts advise that businesses and individuals should avoid relying on social media forwards regarding tax changes. Only official CBIC notifications, circulars, and FAQs provide accurate guidance on compliance and benefits. Following unverified sources could lead to confusion or errors in tax filings.
