GST Council Gives Small Businesses And Exporters Reason To Cheer 

Exporters and small businesses got relief as the Goods and Services Tax Council in its 22nd meeting announced multiple measures to make transition to the new uniform indirect tax easier. The Council also reduced the tax rate on 27 items.

Here are the highlights:

• Exporters will get tax refunds by October 10 for July and by October 18 for August
• An e-wallet for exporters will be created, and through it, a notional amount will be advanced to them
• The e-wallet facility will preferably be set up by April 1, 2018
• A nominal GST rate of 0.1 percent will be levied on exports till March 31
• GST exemption will be provided to exporters until March 31

Composition Scheme Eligibility Raised

• Threshold for Composition Scheme in GST hiked from Rs 75 lakh to Rs 1 crore
• Traders will pay 1 percent tax, manufacturers to pay 2 percent and restaurants owners to pay 5 percent tax under the Composition Scheme

Companies With Turnover Up to Rs 1.5 Crore Can File Quarterly Returns

• 95 percent tax comes from large taxpayers, rest 5 percent – which is a larger number – have a turnover of less than Rs 1.5 crore
• About 15.5 lakh companies have a turnover of less than Rs 1 crore and joined the Composition Scheme
• Other taxpayers with turnover up to Rs 1.5 crore can file quarterly returns instead of monthly returns
• Group of Ministers to set up to examine this, and will submit recommendations in two weeks

The GoM will look into the following issues:

• Inter-state supply of goods for those who avail the Composition Scheme
• Exempted goods' sale by traders availing the Composition Scheme
• Whether input tax credit can be availed if tax at the rate of 2 percent is paid

Other Decisions

• GST rates on restaurants will be revisited. The Group of Ministers will decide whether tax can be reduced if they are not able to avail the benefit of input tax credit.
• Reverse charge mechanism will be reversed until March 31 to help small assessees.

GST Rates Cut

The Council cut tax rates on 27 items including the following:

• Sliced dried mangoes reduced to 5 percent from 12 percent
• Khakra and plain chapati lowered to 5 percent from 12 percent
• Unbranded namkeen to be taxed at 5 percent from 12 percent
• Unbranded ayurvedic medicine lowered to 5 percent from 12 percent
• Paper waste reduced to 5 percent from 12 percent
• Tax on manmade yarn lowered to 12 percent from 18 percent
• Kota stones, with the exception of marble, lowered to 18 percent from 28 percent
• Parts of diesel engines, pump parts lowered to 18 percent from 28 percent
• Jobs works on imitation jewellery, printing items lowered to 5 percent from 12 percent