GST Council eases tax filing norms for small traders

Marsha Scott
October 7, 2017

The Council made a decision to continue with two pre-GST era schemes that allow duty-free sourcing of materials for export production till March 2018, a move that will improve the liquidity of exporters by preventing their working capital from getting locked up in tax procedures.

- Man-made yarn will now be taxed under 12 per cent slab as against 18 per cent - this will bear an impact on the price of textiles. GST rate for AC restaurants may get come down to 12 per cent from existing 18 per cent.

In a meeting with the Revenue Secretary last month, exporters had said that an estimated Rs 65,000 crore is locked up in GST refunds. And on the basis of this credit, firms can pay IGST and GST.

The GST Council meeting, which will be 22nd meeting of the Council, is also expected to discuss and announce measures to reduce the burden on small taxpayers and improvements in the GST Network's functioning.

Ajay Sahai, head of the Federation of Indian Export Organisation, said he expected the government to allow its 25,000 small and medium-sized members to file tax returns quarterly.

Quoting sources moneycontrol.com reported that the GST rate on some handicraft items may be cut to 5 percent from 12 percent.

Now forSMEs with annual turnover of Rs 1.5 crore will be allowed to file quarterly returns, this will be a big relief to the small-scale players.Banerjee further commented that deferment of ReverseCharge Mechanism (RCM) is welcome as it encourages registered taxpayers to continue sourcing from small and unregistered taxpayers.

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The GST rate on diesel engine parts will be reduced to 18 per cent. An additional GST compensation cess is also levied on certain luxury products and demerit goods such as tobacco and pan masala.

He also reminded traders and company owners to make use of the opportunities provided by the department before stern action was taken against them for failing to declare their GST statements from Jan 1 next year.

The tax rates under composition scheme is 1 per cent for traders, 2 per cent for manufacturers and 5 per cent for restaurants.

"Future exports that they will do till March 31 will work through that exemption in which the nominal of 0.1 per cent will be given and after that we will work to establish the e-wallet by April 1, 2018".

Jaitley has promised steps to boost economic growth back above 7 percent and towards the levels economists say India requires to generate employment for the one million entering the workforce every month.

The finance minister added that the pattern of collection [of the GST] is not clear after two months, because it was a period of transition.

Other reports by MaliBehiribAe

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