GST Relief For Small Trader, Exporter

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27 Oct, 17 12:48
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New Delhi: Three months after the rollout of the new indirect tax regime, the GST Council on Friday made sweeping changes to give relief to small and medium businesses on return filing and payment of taxes, eased rules for exporters and cut tax rates on more than two dozen items.
Businesses with an 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 the 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 the current Rs 75 lakh.
"The compliance burden of medium and small taxpayers in GST is being reduced," Finance Minister Arun Jaitley told reporters after the 22nd meeting of the Council.
Small and medium enterprises had complained of the 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.
Jaitley said big taxpayers, who contribute 94-95 per cent of the total taxes, will continue to file monthly returns and pay taxes on a monthly basis.
Also, a group of ministers has been asked to go into the issue of extending the Composition Scheme on inter-state sales as well as rationalising taxes on restaurants.
The switchover to quarterly tax filing for small and medium businesses would happen from October 1 and they will have to file monthly returns for the first three months of GST, which was implemented from July 1.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 the 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.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 (without alcohol).
Service providers cannot opt for the Composition Scheme. The scheme allows small businesses, including eateries, to pay 1-5 per cent 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. Eating out is also set to become cheaper with the GST Council agreeing to reduce the GST from the current 18 to 12 per cent. - PTI
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