Goods & Services Tax Tries To Be Better & Simpler

Dianna Christensen
October 8, 2017

Gujarat Finance Minister Nitin Patel on Friday said, "The decision will bring relief to the small traders in Gujarat".

Inaugurating a National Conclave on GST, organised by PHD Chamber of Commerce and Industry (PHDCCI), Shiv Pratap Shukla, Minister of State for Finance, urged India Inc not to measure the execution of GST in its first phase of three months as it was a big tax reform and needed "minimum one year" for its ideal implementation. At its 22nd meeting, the Council, of which all states Finance Ministers are member, took several decisions to facilitate ease of doing business. "This will benefit small businesses and substantially reduce compliance costs", the finance ministry said in a press release.

India announced a significant revamp of the goods and services tax (GST) regime three months after it was rolled out, addressing key complaints, especially those of small-scale industry and exporters. But after a whole day meeting, one thing that came forward is that the GST is a big failure.

Government contracts involving high amount of labour will be charged 5 per cent GST.

The businesses having turnover of up to Rs.1.5 crore annually, constitute about 90% of the taxpayer base but pay just 5-6% of the overall tax, are now allowed to file returns on quarterly, instead of filing monthly returns.

GST on unbranded namkeen, unbranded ayurvedic medicine, sliced dried mango and khakra has been cut to 5 per cent from 12 per cent, while the same on man-made yarn used in textile sector has been reduced to 12 per cent from 18 per cent. The GST council meet was held to review the progress of GST after receiving feedback from businesses across the nation and state government's.

The composition scheme, meant to ease compliance for small units, will be extended to businesses with a turnover of up to ₹1 crore a year from the previous limit of ₹75 lakh.

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Under the composition scheme, the tax rate for traders of goods will be one per cent, two per cent for manufacturers and five per cent for restaurants and suppliers of food or drinks.

The GST Council has also constituted a panel to consider rationalising GST rate for restaurants, he added.

"The tax refunds to exports will start from October 10".

GST was implemented across the country from July 1 and from then on an average of 70 percent of the registered tax payers cum traders have been paying taxes monthly. The exporters will receive some notional credit in their e-wallet as an advance. "The idea of a nominal 0.1% GST is innovative and the concept of e-wallet is a good move in the digital direction", said Siddhartha Rajagopal, executive director, TEXPROCIL. The August backlog would be cleared from October 18.

Arun Jaitley further announced the launch of an e-wallet for exporters, which is most likely to be launched on April 1, 2018.

There is a strong buzz that the council might defer the reverse charge mechanism (RCM) which is creating problems for small businesses.

Other reports by GlobalViralNews

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