Meranews, Ahmedabad: Gujarat being an entrepreneurial state, the changes in GST is seen positive in the upcoming elections, proposed in December this year. According to industry experts, the changes in GST seem to be populist one.
The Goods and Service Tax (GST) Council on Friday raised the composition scheme threshold for businesses to Rs 1 crore, which will allow them to pay a tax of 1 per cent to 5 per cent, without having to deal with a three-stage filing process.
The decision was taken during the 22nd GST Council meeting, which was chaired by Union Finance Minister Arun Jaitley in New Delhi.
The impact of the GST on trade, and its transition issues were discussed in the meeting held earlier on Friday.+
The panel decided to give an option to taxpayers to avail the composition scheme if their turnover is less than Rs 1 crore as against the previous limit of Rs 75 lakh.
Under the composition scheme, the tax rate for traders of goods will be 1 per cent, 2 per cent for manufacturers and 5 per cent for restaurants and suppliers of food or drinks.
The GST Council also announced tax relief for exporters.
"The tax refunds to exports will start from October 10. There will be a nominal 0.1 per cent GST applicable on exports," said the finance minister.
The small and medium enterprises (SMEs) with an annual turnover of Rs 1.5 crore will be allowed to file quarterly returns.
"Small businesses will also have to file monthly returns for three months – July, August and September – and the switchover to quarterly filing will happen from the cycle starting October 1," Jaitley added.
"Every exporter will now get an e-wallet. In the e-wallet, there would be a notional amount for credit. The refund they will eventually get will be offset from that amount. The e-wallet will be introduced from April next year," Jaitley added.
He further said that the reverse charge mechanism for transactions between registered, unregistered business has been deferred till March 31, 2018.
The Finance Minister added that the pattern of collection [of the GST] is not clear after two months, because it was a period of transition.
Prime Minister Narendra Modi, earlier on Wednesday, had also assured that the glitches would be fixed, in an hour-long speech on the Indian Economy.
Meanwhile, the GST on few other items was reduced.
Jaitley said the GST on khakra and unbranded namkeen has been reduced from 12 per cent to 5 per cent. The tax on zari work, unbranded ayurveda medicine has been reduced from 12 to 5 per cent.
The GST rate on some stationery items, diesel engine parts has also been reduced to 18 per cent from the earlier 28 per cent.
Commenting on it, Vice President of Gujarat Chamber of Commerce and Industries (GCCI), Jayendra Tanna said, “With around 60 changes in GST, government has tried to please the consumers. So we can say it is more a populist approach, considering the upcoming elections.”
However, according to Tanna who is also leader of small traders in Gujarat, there are many sectors that have been avoided by the government from availing the benefits, like traders and textile sector.
A businessman, on condition of anonymity said, “The HSN code has been made mandatory for everyone. This was only for manufacturers; traders should have been avoided from it. Therefore, I think it is half hearted announcement,”
The industry, however, has welcomed quarterly filing of GST instead. Also the exemption of KYC (know your customer) for jewellery sector on purchase of upto Rs 2 lakh has been appreciated by the industry as it was the long pending demand from jewellers.
(inputs from ANI)