GST eased for small businesses ; rates reduced for 27 items

arun-jaitley gst

The GST Council has announced a few amendments in the GST Law so as to make business simpler for the SMEs and exporters.

On Friday, 7th October 2017, the GST Council held its 22nd meeting at Vigyan Bhawan, New Delhi. After the conclusion of the meeting, finance minister Arun Jaitley briefed the reporters about the decisions taken there. He said that “GST Council considered the implementation experience of the last three months”, “Impact of GST on various sectors was discussed.” He further added, “Compliance burden of medium and small taxpayers in GST is being reduced.”

Highlights of changes made :-

  • quarterly returns instead of monthly returns
  • increased threshold for composition scheme
  • reduced tax rates for 27 items
  • relief given to exporters

Jaitley said that the tax burden on SMEs was already low, but the compliance was a little high. Also, 95% of the total tax collection is made from the large tax payers. The businesses with turnover under ₹1.5 crores (which constitutes 90% of the total number of businesses) contribute only about 5% of the total tax revenue.

Compliance relief to small business :-

The council has decided to allow small business with turnover upto ₹ 1.5 crores to file returns and pay taxes quarterly instead of monthly. The transition to quarterly tax filing will take place from 1st October. Further, the threshold limit of turnover for businesses to avail the benefits of composition scheme has been raised from ₹75 lakhs to ₹1 crore. Till now, over 15 lakh out of 90 lakh registered businesses have opted for the composition scheme.

Reduced rates for 27 items :-

GST rates of 27 items have been reduced which will result in cheaper goods. Tax slab rate of unbranded namkeen and ayurvedic medicine, sliced dried mango, khakra and plain chapati has been reduced to 5 percent from 12 percent. E-waste GST rate has been reduced to 5 percent from 28 percent. Stationery items, stones used for flooring (other than marble and granite), diesel engine parts and pump parts have encountered reduction in rates from 28 percent to 18 percent.

Checkout the complete list of 27 items here.

Exporters will now be getting refunds for the tax paid by them on exports during the month of July and August by 18th October. They will now operate under an exempted category paying a nominal 0.1 percent GST. From 1st April 2018, e-wallet facilities will be launched for the exporters to facilitate liquidity.

The press release of 22nd GST Council meet :-

After the meeting, Prime Minister Narendra Modi, in a series of tweets praised GST Council’s recommendation, congratulated Arun Jaitley and reassured the citizens that their interests are in line with the GST.

 

Please follow and like us:

About Udit Goswami

A finance enthusiast, Udit Goswami is a CA Final student and an undergraduate from University of Delhi, currently working as an Article Trainee at Dhruva Advisors in the M&A Tax department.

View all posts by Udit Goswami →

3 Comments on “GST eased for small businesses ; rates reduced for 27 items”

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.