JOIN USGST rates cut on 27 items
The Goods and Services Tax (GST) Council on Friday gave a major relief to the general public, small traders and exporters.
The council reduced tax rates on 27 items of mass consumption, gave relief from filing monthly tax returns to small and medium businesses and almost exempted exporters from paying tax till March 2018.
The major overhauling in the GST rate structure and concessions came within 100 days of its rollout. Businesses with a turnover of up to Rs 1.5 crore were allowed to file quarterly tax returns as against monthly filings at present.
Finance Minister Arun Jaitley said almost 90% of the traders registered under GST regime fall under this category. The eligibility of composition scheme was increased to Rs 1 crore from the current Rs 75 lakh.
Major items on which taxes were reduced on Friday included food packets distributed for children under the Integrated Child Development Services, stationary items, textile sector (man-made yarn), stones for flooring except for granite and marble, unbranded ayurvedic medicine, ‘chapatis’ and ‘khakhra’, unbranded ‘namkeen’, diesel engine parts and pumps.
Among the services, tax rates were reduced for job workers to 5% from 12%. Taxes were also cut on government contracts that involved intensive labour, like irrigation projects, to 5%.
The GST Council also set up a Group of Ministers (GoM) to study taxation regime for restaurants, especially the bifurcation on the basis of air-conditioned and non-air-conditioned categories.
The GoM would give its recommendations within two weeks. Eating out could get cheaper after that.
Jaitley said merchant exporters can export by paying a nominal GST of 0.1% till March 2018 that will shield them from lack of credit arising out of a late refund.
From April 1, 2018, the government would launch e-wallet for the exporters. A notional amount will be deposited in the wallet for refund purposes.
He also said that the refund for the months of July and August would be processed and cheques would be handed out to the exporters by October 10.
Along with this, the GST Council said it was open to more suggestions from stakeholders before it meets in Guwahati on November 9-10.
The council also agreed to bring e-Way bill by April 1 to facilitate movement of goods from one check post to another. Jaitley said Karnataka has already experimented with the e-way bill mechanism and the “response is positive”.
The requirement of reverse charge mechanism was done away with until March 31. Reverse charge is a mechanism where the recipient of the goods and/or services is liable to pay GST instead of the supplier.