Dainik Nation News Portal
DAINIK NATION BUREAU
In a bid to give relief to small and medium businesses on filing and payment of taxes, GST council has made comprehensive changes, by giving them relief on filing and payment of taxes, eased rules for exporters and cut tax rates on 27 items. It happened three months after the implementation of GST regime. Although big taxpayers, who contribute 94-95 per cent of the total taxes, will continue to file monthly returns and pay taxes on a monthly basis. It happened in first meeting fo GST council after explosion made by BJP senior leader yashwant sinha by criticising PM and FM both on demonetisation and GST.
Businesses with annual turnover of up to Rs 1.5 crore, which constitute 90 per cent of the taxpayer base but pay only 5-6 per cent of total tax, have been allowed to file quarterly income returns and pay tax instead of the current provision of monthly filings. The turnover threshold for businesses
To avail of the composition scheme that allows them to pay 1-5 per cent tax without going through tedious formalities, was raised to Rs one crore from current Rs 75 lakh.
“Compliance burden of medium and small taxpayers in GST is being reduced,” said Arun Jaitley, union Finance Minister Arun Jaitley after the 22nd meeting of the Council. Small and medium enterprises had complained of tedious compliance burden under the GST that was supposed to be a simple indirect tax regime which replaced over a dozen Central and state taxes.
GST on unbranded namkeen, ayurvedic medicine, sliced dried mango and khakra has been cut to 5 per cent from 12 per cent, while the same on man-made yarn used in textile sector has been reduced to 12 per cent from 18 per cent.
Tax on stationery items, stones used for flooring (other than marble and granite), diesel engine parts and pump parts has been cut to 18 per cent from 28 per cent. GST on e-waste has been slashed to 5 per cent from 28 per cent.
Food packets given to school kids under Integrated Child Development Scheme (ICDS) will attract 5 per cent tax instead of 12 per cent. Job works like zari, imitation, food items and printing items would attract 5 per cent tax instead of 12 per cent.
Government contracts involving high amount of labour will be levied 5 per cent GST instead of 12 per cent in order to contain cost of those programmes. Exporters, who have been facing sluggish growth due to global slowdown, will get refunds for the tax paid by them on exports during July and August by October 18.
For the remainder of the fiscal, they will operate under an exempted category paying a nominal 0.1 per cent GST, he said, adding from April 1 attempt would be made to launch an e-wallet facility for the exporters to provide liquidity.
Also, a group of ministers has been asked to go into the issue of extending the composition scheme on inter-state sales as well as rationalising taxes on restaurants.
The switchover to quarterly tax filing for small and medium businesses would happen from October 1 and they will have to file monthly returns for the first three months of GST, which was implemented from July 1, he said.
With small businesses and traders complaining about the compliance burden the new Goods and Services Tax (GST) regime has put on them, the panel decided to give the option to taxpayers to avail of the so-called Composition Scheme if their turnover is less than Rs 1 crore as against the previous limit of Rs 75 lakh.
So far, over 15 lakh out of the 90 lakh registered businesses have opted for the composition scheme. The tax rate for traders of goods in the composition scheme is one per cent, while it is two per cent for manufacturers and five per cent for suppliers of food or drinks for human consumption (without alcohol).
Service providers cannot opt for the composition scheme. The scheme allows small businesses, including eateries, to pay 1-5 percent tax without having to deal with the three- stage filing process. It only allows small taxpayers to pay GST at a fixed rate of turnover and not go through the tedious GST formalities.
The scheme cannot be opted by supplier of services other than restaurant related services; manufacturer of ice cream, pan masala, or tobacco; casual taxable person or a non- resident taxable person; and businesses which supply goods through an e-commerce operator. No input tax credit can be claimed by those opting for composition scheme.
After assessing the readiness of the trade, industry and Government departments, it has been decided that registration and operationalization of TDS/TCS provisions shall be postponed till march 2018. The e-way bill system shall be introduced in a staggered manner with effect from January 2018 and will be rolled out nationwide with effect from April 2018. This is in order to give trade and industry more time to acclimatize itself with the GST regime.
