In a relief to small and medium enterprises, the powerful GST Council, headed by Union Finance Minister Arun Jaitley, today announced a slew of measures to ease the concerns of traders, exporters and small business while slashing the rates on 27 items of common consumption. The Council also abolished GST on import of a number of goods, including rigs for oil and gas exploration and medicines supplied free by international agencies and bonafide gifts up to Rs 5,000.
Finance Minister Arun Jaitley made the announcements after a day-long 22nd meeting of the GST Council that took note of the difficulties faced by various businesses, a development that came two days after Prime Minister Narendra Modi promised to remove the shortcoming in the new indirect tax regime and to ease woes of traders.
In a relief to exporters, the Minister said returns for the month of July and August would be refunded through cheques from October 10 and October 18 respectively. The Minister said it would be an interim relief and as a long term measure e-wallets will be created for all exporters by April 1, 2018 to carry forward the refund process.
He said the GST Council agreed to allow SMEs with turnover of up to Rs 1.5 crore file their quarterly returns instead of monthly -- a relief that would benefit about 90 per cent of taxpayers in the country. Cumbersome return filing process had created one of the major compliance issues in the new tax regime that required traders to file three returns a month.
The threshold for composition scheme in GST has been raised from Rs 75 lakh to Rs 1 crore for businesses to avail the scheme that allows them to pay 1-5 per cent tax without going through tedious formalities. This threshold of turnover for special category states, except Jammu and Kashmir and Uttarakhand, has been increased to Rs 75 lakh from Rs 50 lakh. Under the composition scheme, a taxpayer is required to file summarized returns on a quarterly basis, instead of three monthly returns.
Jaitley said traders, manufacturers and restaurants would now pay 1 per cent, 2 per cent and 5 per cent respectively under composition scheme. Service providers cannot however opt for the composition scheme.
The roll out of e-way bill, another issue that has been under consideration for a long time, has been deferred to March 31, 2018.
LATEST CHANGES IN THE GST RATES OF VARIOUS GOODS
The government also revoked GST notification on gems and jewellery. A separate notification in this regard will be issued later. Bringing in some more reforms, the government said that any person buying jewellery worth above Rs 50,000 will not have to furnish PAN card and Aadhaar Card details. Entities dealing in gems, jewellery and other high value goods and has an annual turnover of over Rs 2 crore will no longer be under the purview of the money laundering act.
LATEST CHANGES IN THE GST RATES OF VARIOUS GOODS
The 27 items on which the rates were slashed include roti, khakra, namkeens, stationery, man-made yarn -- with most of them brought to five per cent category. GST on zari work, unbranded ayurveda medicine, dried mango, e-waste, plastic and rubber waste has been reduced to five per cent. Tax on stationery items, diesel engine parts, pump parts, flooring stones other than marble and granite has been reduced to 18 per cent.
LATEST CHANGES IN THE GST RATES OF VARIOUS GOODS
Eating out is set to become cheaper with the GST Council agreeing to reduce the GST rate from the current 18 percent to 12 percent. Jaitley said a group of ministers would revisit the tax on AC restaurants.
He said first two months of GST returns had thrown up various issues that were taken up at the meeting.
LATEST CHANGES IN THE GST RATES OF VARIOUS GOODS
The GST Council will next meet on November 9 and 10 in Guwahati.
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