NEW DELHI: Three months after the rollout of the new indirect tax regime, the GST Council on October 6 made sweeping changes to give relief to small and medium businesses on filing and payment of taxes, eased rules for exporters and cut tax rates on more than two dozen items.
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.
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.
The finance minister also 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, he added. One of the major compliance issues of the new tax system has been the cumbersome return filing process which requires traders to file three returns a month. Apart from dealing with the GSTN (GST Network) portal issues, filers have also complained of surging compliance charges.
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 percent slab. Among services, job works like zari work, imitation jewelry and printing items have also been brought under this slab.
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.
In another announcement on Friday, the government has also revoked GST notification on gems and jewelry. A separate notification in this regard will be issued later. Bringing forth some more reforms, the government has said that any person buying jewelry worth above Rs 50,000 will not have to furnish PAN card and Aadhaar Card details.
Also, entities dealing in gems, jewelry 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.
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