NEW DELHI: Prime Minister Narendra Modi on Friday night said the GST has become “even simpler” after GST Council’s recommendations and that it is in line with the government’s constant endeavour to safeguard citizens’ interests and ensure India’s economy grows.
He congratulated Finance Minister Arun Jaitley and his team for engaging with various stakeholders for “extensive feedback which led to today’s recommendations” on GST (Goods and Services Tax).
Modi’s comments in a series of tweets came after the GST Council made sweeping changes to GST to give relief to small and medium businesses on filing and payment of taxes, eased rules for exporters and cut tax rates on more than two dozen items.
over a dozen central and state taxes.
Jaitley, while briefing the media on the Council meeting, said a decision has been taken to cut GST rate on 27 common use items.
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.
Tax on stationery items, stones used for flooring (other than marble and granite), diesel engine parts and pump parts has been cut to 18 per cent from 28 per cent. GST on e-waste has been slashed to 5 per cent from 28 per cent.
Food packets given to school kids under Integrated Child Development Scheme (ICDS) will attract 5 per cent tax instead of 12 per cent.
Job works like zari, imitation, food items and printing items would attract 5 per cent tax instead of 12 per cent.
Government contracts involving high amount of labour will be levied 5 per cent GST instead of 12 per cent in order to contain cost of those programmes, he said.
In a relief to small and medium enterprises, the GST Council on Friday raised the turnover threshold to Rs 1 crore for businesses to avail of the composition scheme that allows them to pay 1-5 per cent tax without going through tedious formalities.
With small businesses and traders complaining about the compliance burden the new Goods and Services Tax (GST) regime has put on them, the panel decided to give option to taxpayers to avail of the so-called Composition Scheme if their turnover is less than Rs 1 crore as against the previous limit of Rs 75 lakh.
The GST Council, headed by Finance Minister Arun Jaitley, at its 22nd meeting reached consensus on increasing composition threshold for SMEs, Andhra Pradesh Finance Minister Y Ramakrishnudu said.
Kerala Finance Minister Thomas Isaac said exporters will get IGST relief and e-wallet facility for six months.
The GST Council has also constituted a panel to consider rationalising GST rate for restaurants, he added.
So far over 15 lakh out of the 90 lakh registered businesses have opted for the composition scheme.
The tax rate for traders of goods in the composition scheme is 1 per cent, while it is 2 per cent for manufacturers and 5 per cent for suppliers of food or drinks for human consumption (without alcohol).
Service providers cannot opt for the composition scheme.
The scheme allows small businesses, including eateries, to pay 1-5 percent tax without having to deal with the three- stage filing process.
It allows small taxpayers to pay GST at a fixed rate of turnover and not go through the tedious GST formalities.
The scheme cannot be opted by supplier of services other than restaurant related services; manufacturer of ice cream, pan masala, or tobacco; casual taxable person or a non- resident taxable person; and businesses which supply goods through an e-commerce operator.
No input tax credit can be claimed by those opting for composition scheme.
Also, the taxpayer can only make intra-state supply (sell in the same state) and cannot undertake inter-state supply of goods.
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© 2017 State Times Daily Newspaper