GST rates reduced on 27 items, relief to small and medium businesses
Federal indirect tax body, GST Council, on Friday announced a series of rule changes and offered relief to small and medium enterprises under goods and services tax (GST), along with this the tax rates of about 27 products and a few services have been slashed.
A panel of state ministers has been asked to examine if the 18% GST on air-conditioned restaurants could be lowered, finance minister Arun Jaitley said post meeting.
The Council headed by Jaitley, in a move to improve the liquidity of exporters, decided to continue with two pre-GST era schemes that allow duty-free sourcing of materials for export production till March 2018.
The Council also decided to clear all tax refund claims of exporters for July by 10 October and for August by 18 October. It has now introduced a 0.1% GST rate for merchant exporters, giving ease from the full applicable GST rates on their procurements.
The steps taken by the Council will provide urgent yet temporary relief to SMEs, said V.K. Agarwal, former president of the Federation of Indian Small and Medium Enterprises.
“Big players pay the largest chunk of GST, while small taxpayers who pay nominal or nil tax face high compliance impact. We are relaxing their compliance burden,” said Jaitley.
More businesses—traders, restaurants and manufacturers—can now sign up for a liberal quarterly tax return filing and payment scheme called the ‘composition scheme’ by raising its eligibility threshold to Rs1 crore of annual sales from Rs75 lakh. Under the scheme, a marginal flat rate of tax is levied.
Small businesses with sales up to Rs 1.5 crore can also now file quarterly tax returns instead of monthly returns.
The Council also reduced the tax rate on a few services such as job works (work that is farmed out to small units by manufacturers), in certain sectors from 12% to 5%.
-PTC News
