GST made simpler for exporters, small traders
After the GST Council meet on Friday, Arun Jaitley announced a slew of measures to reduce the burden and stress the implementation of the new tax regime brought to exporters and small businesses.
RELIEF FOR EXPORTERS
GST Council in its meeting decided to start the refund process for July by October 10. The second tranche of refund for August will start by October 18.
For the remaining months of the financial year, exporters will operate under an exempted category paying a nominal GST of 0.1 per cent. By next April, the government will kick start a new digital e-wallet system for every exporter. The government will deposit a notional amount in the e-wallets in advance and refund will be adjusted against that amount later.
FOR SMALL BUSINESSES
Studying the stress points in the GST regime with 72 lakh taxpayers having migrated to the new tax system, the Council identified that 25-26 lakh GST assessees are new taxpayers.
In a major move, small businesses can now file returns on a quarterly basis compared to the monthly cycle which is currently practiced.
Businesses with annual turnover of up to Rs 1.5 crore can now file quarterly income returns. People under this category form 90 per cent of the vase.
The GST Council also put its stamp on raising the limit of composition scheme to Rs 1 crore from current Rs 75 lakh for small businesses.
The composition scheme is a less paperwork scheme. Those trading in goods under this scheme have to file 1 per cent tax. For manufacturers, the rate is 2 per cent and 5 per cent for suppliers of food or drinks (without alcohol). .
- Council decided to cut GST rate on 27 items. GST on sliced dried mango, Gujarati delicacy khakra, unbranded namkeen and unbranded Ayurvedic medicine was slashed from 12 per cent to 5 per cent.
- There is good news for mid-day meal schemes as well. Food packets for school children under Integrated Child Development Scheme (ICDS) will be taxed at 5 per cent instead of 12.
- In a signal to textile traders in Gujarat, the tax rate on man-made yarn has been fixed at 12 per cent, down from 18 per cent.
- Tax on stones used for flooring (non-marble and granite), diesel engine parts, pump parts and stationery items has been reduced to 18 per cent from 28 per cent.
- There is good news on the services front too. Jobs like imitation, food items, zari and printing items will be taxed st 5 per cent and not 12 per cent. Service providers with less than 20 lakh revenue have be added to the GST exempt list.