To provide the support to small businesses and exporters, the government has slashed the GST rate on certain items.
The GST council’s meeting headed by the Finance Minister Arun Jaitley improved the goods and services Bill and unanimously announced the cut down in the rates of various products.
Contents
The Important Decisions Made During The 25th Meeting Of GST Council:
Announcement Favouring The Exporters’ Happiness:
The GST Council relieved the exporters by announcing that they will get their refunds by checks on October 10 for July month and on October 18 for August month. The exporters are on clock nine as they have received the tax relaxation of 6 months and put under the exemption category to pay 0.1 % GST for rest of the fiscal.
E-wallet Facility For Exporters:
As GST Council is aware of the glitches exporters are facing in refund claims. Considering the cash deferment issue in business, the Council has favored exporters by announcing setup of an E-wallet facility for them. The speculated amount will be given in the wallet as an advance refund, so the firms can easily pay CGST and IGST from the wallet and refunds will be compensated for it.
The launch of the e-wallet will likely to take place on 1st April 2018.
SMEs Will File Quarterly Return:
The small and medium business whose turnover is up to Rs. 1.5 Crore will only file the return quarterly instead of monthly returns. The Finance Minister said that 90% of the small and medium businesses will be profited by this change. Moreover, the taxpayers whose turnover is below Rs. 1 Crore and tax input are low, will be benefitted by the GST composition scheme as the threshold limit for the scheme is increased from Rs. 75 lakh to Rs. 1.5 Crore for small businesses.
Apart from this, the businesses who contribute 94-95% of the total GST tax, will continue to file the GST return as well as taxes on a monthly basis.
Revised Rates On 27 Items:
In the meeting, the finance minister has announced the cut down in GST tax rates on 27 common use products. Here is the refurbished list of products which got a rate cut down in the meeting.
|
S.No. |
Product Name |
Previous Rate |
Revised Rate |
| Food Items | |||
|
1. |
Mangoes sliced dried | 12% | 5% |
|
2. |
Khakra and plain chapati | 12% | 5% |
|
3. |
Unbranded Namkeens |
12% |
5% |
|
4. |
Unbranded Ayurvedic, Unani, Siddha, Homeopathy medicines |
12% |
5% |
| Stationery | |||
|
5. |
Poster Colour |
28% |
18% |
|
6. |
Modelling paste for children | 28% | 18% |
|
7. |
Plastic waste, parings or scrap | 28% | 18% |
|
8. |
Rubber waste, parings or scrap | 28% | 18% |
|
9. |
Hard Rubber waste or scrap | 28% | 5% |
|
10. |
Paper waste or scrap |
12% |
5% |
| Textile | |||
|
11. |
Nil Sewing thread of man made filaments, whether or not put up for retail sale |
18% |
12% |
|
12. |
All synthetic filament yarn, such as nylon, polyester, acrylic, etc. | 18% | 12% |
|
13. |
All artificial filament yarn, such as viscose rayon, Cuprammonium | 18% | 12% |
|
14. |
Sewing thread of manmade staple fibres | 18% | 12% |
|
15. |
Yarn of man made staple fibres | 18% | 12% |
|
16. |
Real Zari |
12% |
5% |
| Other Items | |||
|
17. |
All goods falling under heading (other than those of marble and granite or those which attract 12% GST) |
28% |
18% |
|
18. |
Cullet or other waste or scrap of Glass |
18% |
5% |
|
19. |
Fittings for loose-leaf binders or files, letter clips, letter corners, paper clips and others | 28% | 18% |
|
20. |
Plain Shaft Bearings | 28% | 18% |
|
21. |
Parts suitable for use solely or principally with fixed Speed Diesel Engines of power not exceeding 15 HP | 28% | 18% |
|
22. |
E-Waste |
28% |
5% |
|
23. |
Biomass briquettes |
18% |
5% |
Other Processes Which Are Made Easy:
The GST Council announced that the TDS and TCS registration and operationalisation will be postponed until 30.06.2018. The e-way bill will be introduced and will be effective from 1st April 2018, so that traders can get more of time to understand the newly implemented provisions under GST.
FAQ’s Regarding Composition Scheme:
1. What is composition scheme under GST regime?
The scheme is structured to relief small and medium businesses who generate less income. The objective of the scheme is to provide an easy format to pay GST for SMEs so that they can load off the GST formalities and pay taxes at a fixed interval of three months.
2. Who are eligible to register under composition scheme?
To opt for the GST composition scheme, the turnover for the particular taxpayer is up to Rs. 1.5 Crore. The turnover for Jammu & Kashmir and Uttarakhand is also put up to Rs. 1 Crore to qualify for composition scheme registration.
The benefit of revised composition scheme will be available to new and migrated taxpayer from 31.03.2018.
3. What are the updated rules for composition scheme under GST?
The composition scheme once exercised will become active from the 1st day of the month following the immediate month in which the composition scheme is exercised.
New applicants will only file Form GSTR-4’s portion of the quarter from when the scheme is exercised the first time and the composition dealer will be liable to file the normal taxes under regular taxpayer rules for the preceding tax period.
4. Who are the eligible and ineligible taxpayers to avail composition scheme?
The taxpayers who are otherwise eligible to avail composition scheme but they are providing any exempt service like extending the deposits with the bank and receiving the interests, were previously recognised as ineligible taxpayers under composition scheme.
Now, this rule has been revised and the mentioned taxpayers who are otherwise eligible to avail composition scheme will be eligible to take benefit of the scheme.
5. How does the revised scheme impact the compliance cost now?
Under the composition scheme, the tax rate for traders of goods is 1%, for suppliers of food is 2% and for suppliers and manufacturer of drinks(without alcohol) is 5%. The scheme benefits the small businesses to pay the tax between 1% and 5% and reduces the hurdle to complete the three-stage filing process.
Currently, all the taxpayers who are doing inter-state supplies except job workers are required to register mandatorily under GST regime despite their turnover. Now, the GST Council has announced that those service providers whose annual turnover is less than Rs. 20 lakh and 10 lakh for northeast states except J&K are allowed to register under the scheme even in case of inter-state supplies. This announcement is expected to reduce the compliance cost for small and medium service providers.
6. What is the last date of filing GST returns under Composition Scheme?
The last date to file GST returns in GSTR-4 FORM under composition scheme for the quarter July-Sept, 2019 is 18th October 2019. The last date for input service provider to file a return in FORM GSTR-6 is 13th September 2019 for August month.
