Business News, Nation, (New Delhi), October 7:-Giving a major relief to small traders, the Goods and Services Tax (GST) Council on Friday raised the composition scheme limit to Rs 1 crore from present Rs 75 lakh and announced bonanza for the exporters so that they could get their blocked capital in the tax net.
Not only this, the Council also reduced the tax rates of 27 items paving the way for reduction in their price.
Briefing the media persons after 22nd meeting of GST Council here, Finance Minister Arun Jaitley said that the businesses with turnover of up to Rs 1.5 crore have been allowed to file quarterly returns instead of monthly filings. “This will make the filing easy and the load on the system will go down drastically as 90 per cent of the tax payers have a turnover of less than Rs 1.5 crores who now have to file their GST on quarterly basis, in place of monthly one,” said the Finance Minister.
Giving the details of deliberations and decisions of the daylong meeting, Jaitley said that the GST Council has agreed to allow SMEs with turnover of up to Rs 1.5 crore to file quarterly returns instead of monthly filings. About 90 per cent of the taxpayers will be benefited by this change. The threshold for composition scheme in GST has been hiked from Rs 75 lakh to Rs 1 crore for businesses to avail of the composition scheme.
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 will pay 1 per cent, 2 per cent and 5 per cent respectively under composition scheme. Service providers cannot opt for the scheme.
The GST Council also reduced rates for a bevy of goods and services. As many as 27 items including unbranded namkeen, unbranded ayurvedic medicines, handmade yarn, ICDS food packages, khakra chapati, waste obtained from rubber, plastic and paper have been brought under the 5 per cent slab. Among services, job works like zari work, imitation jewellery and printing items have also been brought under this slab.
In a relief to exporters, it was announced that returns for the month of July and August will be refunded through cheques from October 10 and October 18 respectively, Jaitley said.
Moreover, an e-wallet will be created for each exporter by April 1, 2018 to carry forward the process. Till then, the exporters will have to pay a nominal GST of 0.1 per cent. He said that 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.The experience of Karnataka where it is in place has been encouraging,” said Jaitley. He added that Group of Ministers (GoM) would be formed to study taxation regime for restaurants, especially on bifurcation on basis of AC and non-AC restaurants.
GoM to decide on bringing down the rate for AC restaurants to 12 percent. Jaitley said reverse charge mechanism for transactions between registered and unregistered businesses has been deferred till March 31, 2018. A GoM has been set up to decide on turnover calculation mechanism and its report is due in two weeks.
On the occasion, Revenue secretary Hasmukh Adhia said that 90 percent of the taxpayers will file quarterly returns and pay tax every three months as well. He added that 2 per cent tax will be applicable on manufacturing companies under composition scheme while 5 per cent tax will be applicable on restaurants under the same scheme.
-(NAV, Inputs: Agencies)