New Delhi: Amid tepid GDP growth numbers and criticism from small businesses and export houses, Finance Minister Arun Jaitley-led Goods and Services Tax Council met on Friday to review the implementation of tax regime and announced a slew of measures to boost economic activity.
Jaitley said small businesses would be allowed to file tax returns once a quarter instead of monthly returns. The compliance burden of SMEs in GST has been cut while eligibility of composition scheme has raised to Rs 1 crore.
GST rate on some stationery items, diesel engine parts has been reduced to 18% from 28%.
GST rates of 27 items reviewed by the GST Council, including sliced dry mangoes, khakhra, unbranded namkeen, chapati have also been cut.
A group of ministers will study taxation regime for restaurants, especially on bifurcation on basis of AC & non-AC restaurants. If this gets through, air-conditioned restaurants will charge 12% GST, lower than 18% at present.
Tax refunds of July and August for exporters will be processed from 10 October, said Jaitley, adding that e-wallet for exporters to start from 1 April 2018.
“GST doesn’t have exemptions, and hence there will be an e-wallet for each exporter with a notional advance refund amount. E-wallet for exporters to be implemented by 1st April 2018, till then they can file GST on the rate of nominal 0.1%,” said Jaitley.
Jaitley said reverse charge mechanism for transactions between registered and unregistered businesses has been deferred till March 31, 2018.
The government also scrapped GST notification on gems and jewellery stating that PAN card will no longer be mandatory on the purchase of jewellery for over Rs 50,000.
Small and medium-sized enterprises, crucial to Prime Minister Narendra Modi’s plans to create millions more of jobs, have been hurt by the massive tax overhaul that added layers of extra bureaucracy for firms and hit exports.
Recently, Rashtriya Swayamsevak Sangh chief Mohan Bhagwat said small businesses must be protected. “While reforming and cleaning the economic systems, although some tremors and instability is expected, it should be kept in mind that these sectors (SMEs) should feel the minimum heat and ultimately they should get the maximum strength,” Bhagwat had said during annual Vijayadashmi speech.
Source: News18