GST Council meeting: From reduced GST slabs to simplifying procedures, 10 relief measures to expect today
The 22nd meeting of the Council comes on the back of promises made by PM Narendra Modi to remove glitches in the GST.
The 22nd meeting of the all-powerful GST Council that began today at Vigyan Bhavan in the national capital is expected to provide some much-needed relief to traders and exporters, particularly small and medium businesses.
The Council’s meeting comes in the backdrop of a string of complaints and attacks on the new all-pervasive national tax regime that set out to achieve the idea of ‘One Nation, One Tax’.
On the Council’s agenda at today’s meeting is a relook at procedures for businesses and discussions on changes that need to be brought about based upon the learnings of the government and the feedback it has received in the three months since GST launch.
Note that the central government can only propose a change and the final decision can only be taken by the GST Council.
The meeting comes close on the heels of Prime Minister Narendra Modi’s address at an ICSI event on Wednesday where he promised that the government would fix glitches pertaining to the GST. This was followed up with the PM’s over three-hour brain-storming session with Finance Minister Arun Jaitley and BJP chief Amit Shah on Thursday.
As the meeting concludes, traders and businesses will be waiting for some relief from the government with bated breath.
Here are 10 relief measures that the GST Council could decide on:
- With the primary attention of the GST Council and the government expected to be providing relief to small and medium businesses and exporters, some procedures related to GST returns filing may be tweaked. Businesses currently need to file three returns every month and one annually. This could be altered to a quarterly exercise for businesses with a turnover of up to Rs 1.5 crore.
- The GST Council could also agree to a proposal to increase the threshold for the composition scheme - which allows small traders to pay a standard tax rate - from Rs 75 lakh in anjual turnover to Rs. 1 crore. This will allow small eateries to pay the 1-5 per cent tax without undertaking the three-stage filing process.
- The Council is also expected to take up proposals regarding suspension of the reverse charge mechanism. This rule shifts the liability to pay the tax on the buyer instead of than the seller. This could be suspended for unregistered traders.
- One of the promises PM Narendra Modi made during his speech on Wednesday was that the government would not resort to any retrospective investigation into traders joining the new tax regime. These matters primarily relate to the VAT regime and the PM had said this will not be looked into. One may expect the GST Council to formally decide on this.
- GST Rates for as many as 60 items could be brought down at today’s meeting of the GST Council. On cards is change in rates for textiles which would provide relief to traders as well as consumers to some extent.
- Faster refunds and relief in terms of compliance have been some of the key demands of exporters. A decision to meet these demands could be arrived at today. Changes to this effect would ensure that exporters get their working capital locked up in refunds released quickly. Delayed GST tax refunds have also resulted in severe fund shortage for exporters, who fear funds worth Rs 65,000 crore could get locked up in GST input tax credits if rules are not eased.
- Problems in the functioning of GST Network have led to maximum hassles for tax payers in the past two months. Right from GST registration to filing of GSTR forms, the GSTN has performed far less than satisfactory. At the Council’s meeting today, this issue will come up for discussion and measures to improve its performance may be recommended.
- Duty on food preparation distributed in containers to economically weaker sections under state or central government schemes is expected to be reduced from 18 per cent to 5 per cent.
- Stones used for buildings will can see a lower levy of 18 per cent. At present, the levy is 28 per cent.
- The council may also consider reducing the burden on cars that were leased before July 1 and where the tax rate has risen to up to 50 per cent.