India Inc today welcomed the outcome of the GST Council meet and said the decisions will improve compliance and provide much needed relief to the taxpayers.
CII Director General Chandrajit Banerjee said that the SME sector compliance will greatly improve as limit for composition scheme has been increased to Rs 1 crore. Now for SMEs 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 Reverse Charge Mechanism (RCM) is welcome as it encourages registered taxpayers to continue sourcing from small and unregistered taxpayers.
The decision to bring down rate for AC restaurants to 12 per cent and reduction of tax slabs for around 60 items to 5 per cent from 12 per cent will help boost household spending and further economic growth, he said.
Banerjee also stated that raising of turnover for composition scheme from Rs 75 Lakh to Rs 1 crore and deferment of E-way bill provisions till April 2018 are indeed a big relief which will help trade and industry in getting adjusted to the GST compliances.
Exporters body FIEO’s President Ganesh Kumar Gupta said that these initiatives will address the problem of the exporters particularly micro and small segments.
“The refund of GST for the month of July by 10th October and August by 18th October will address the liquidity concerns of the exporters,” he said.
Gupta also welcomed the decision to introduce e-wallet, mooted by FIEO, at the introduction of the GST which will provide a permanent solution to the liquidity problem of the export sector.
These are very pragmatic decisions which show the flexible approach of the government which will ameliorate the problem of export sector and will impart much needed competitiveness to exports, Gupta said.
The GST Council today made sweeping changes 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.
Businesses with annual turnover of up to Rs 1.5 crore, which constitute 90 per cent of the taxpayer base but pay only 5-6 per cent of total tax, have been allowed to file quarterly income returns and pay tax instead of the current provision of monthly filings.
Also, the turnover threshold for businesses to avail of the composition scheme that allows them to pay 1-5 per cent tax without going through tedious formalities, was raised to Rs 1 crore from current Rs 75 lakh.
Small and medium enterprises had complained of tedious compliance burden under the Goods and Services Tax (GST) that was supposed to be a simple indirect tax regime which replaced over a dozen Central and state taxes.
The Council also decided 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.
Exporters, who have been facing sluggish growth due to global slowdown, will get refunds for the tax paid by them on exports during July and August by October 18, he said.
For the remainder of the fiscal, they will operate under an exempted category paying a nominal 0.1 per cent GST, he said, adding from April 1 attempt would be made to launch an e-wallet facility for the exporters to provide liquidity.