GST rates tweaked to help exporters & small traders
NEW DELHI: The GST Council in its 22nd meeting on Friday announced a slew of relief for exporters, some of whom are facing a working capital squeeze due to the delayed tax refund. Finance Minister Arun Jaitley, who heads the Council, said that the refunds for exporters will be expedited. For July, refund cheques of exporters will be processed by October 10 and for August exports by October 18. Jaitley also said that an electronic wallet (e-Wallet) will be set up by April 2018 for refunds to exporters. Exporters will get a notional advance amount in their e-Wallets and it will be later offset with tax refunds.
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 a 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 number 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 within its' purview.
In another announcement on Friday, the government has also revoked GST notification on gems and jewellery. A separate notification in this regard will be issued later. Bringing forth some more reforms, the government has said that any person buying jewellery worth above Rs 50,000 will not have to furnish PAN card and Aadhaar Card details.
Also, entities dealing in gems, jewellery 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.
Eating out is set to become cheaper with the GST council in-principle agreeing to reduce the GST rate from the current 18 percent to 12 percent.