Bringing significant relief to small and medium businesses and exporters, the Goods and Services Tax (GST) Council on Friday finalised a slew of relaxation measures. It also lowered GST rates for 27 items.
Exporters’ tax refunds, which have been pending, will be cleared over the next two weeks — those for July by October 10, and for August by October 18. For exports till March 31, the previous GST exemptions such as advance authorisation, EPCG will continue. A nominal I-GST of 0.1 per cent will apply for merchant exports if they buy from domestic manufacturers.
“The decisions were made based on the consideration of how to improve revenue and to create convenience for tax payers based on the revenue pattern,” said Finance Minister Arun Jaitley, who chairs the GST Council.
Similarly, the GST rate for job work services provided by Zaria workers, imitation jewellery, printing and food items has been cut to 5 per cent.
However, the fitment committee will hencforth decide rates based on a concept paper, and not on an ad-hoc basis.
Friday’s move, which comes nearly 100 days after the indirect tax levy was rolled out on July 1, came in response to representions from India Inc over difficulties in filing returns and securing refunds.
The e-way bill will be rolled out between January 1 and April 1, 2018. From April 1, an e-wallet facility will be available for exporters.
Similarly, to lower the compliance burden on small and medium businesses, the threshold for the composition scheme has been increased to an annual turnover of ₹1 crore from the earlier ₹75 lakh.
Further, the facility of quarterly return filing will be available for businesses with an annual turnover of up to ₹1.5 crore.
“These small and medium taxpayers account for nearly 90 per cent of GST return filers, but may pay marginal or zero tax,” Jaitley said.
The relaxation will be available for returns that are filed from October.
A group of State finance ministers will also be set up to look into the taxation structure of restaurants and what should be done as they have not reduced prices despite input tax credit. It will also look into the definition of turnover and inter state sales by those interested he composition scheme.
Prime Minister Narendra Modi had on Thursday met with Finance Minister Arun Jaitley and BJP President Amit Shah on Thursday; these measures are understood to have been discussed to boost industry after economic growth hit a three-year low in the first quarter.
The meeting of the GST Council was advanced from late October to ensure fast resolution of concerns of exporters and small businesses.
The Council had in its previous meeting also decided to set up two committees to look into the problems being faced by exporters and the technical glitches in the GST IT network.
A Group of Ministers led by Bihar Deputy Chief Minister Sushil Modi was looking into issues relating to IT and GST Network.
Separately, a committee chaired by Revenue Secretary Hasmukh Adhia had proposed solutions to the issues being faced by exporters under the new levy.