GST Council set to give relief to SMEs and exporters today
- Author: Zachary Reyes Oct 07, 2017,
Oct 07, 2017, 12:22
Taking stock of the exporters' working capital that was blocked under the GST, thus affecting cash liquidity, the Council has chose to disburse their refunds through checks for July and August from October 10 and October 18 onwards, respectively.
Central and state government officials met in New Delhi on Thursday to consider proposals to be placed before the GST Council on Friday. The decision, an interim one, was based on the recommendations of a committee headed by Revenue Secretary Hasmukh Adhia.
To make the procedure of refund for exporters, the government will provide each entity with an e-wallet that would receive direct refunds from the government. The refund they will eventually get will be offset from that amount. A technology company will be allotted the task of developing the e-wallets for exporters.
Office articles such as files and loose-leaf binders, letter clips, indexing tags and upholstery have also turned cheaper with the GST being reduced to 18%from26%. Majority of these items included food items, man-made yarn and various type of waste (rubber, plastic and electronic). The GOM will have to submit its report within a period of two weeks. Normally, it is the supplier's obligation to collect taxes from the buyer and pay the government. The limit of accepting the composition scheme is also extended from Rs 75 lakh to Rs 1 crore.
Retrospective enquiry exemption: Finance Ministry may exempt traders from retrospective enquiry into the previous VAT (Value Added Tax) regime.
Jaitley said that items, including, khakhra, plain chapati, food packets, used in the Integrated Child Development Services scheme, and unbranded namkeen will now be taxed at 5 per cent instead of 18 per cent. These traders can file quarterly returns from now onwards.
The objective behind it is to bring simplicity and reduce the compliance cost for small taxpayers. Jaitley said 94-95 per cent of taxes came from big taxpayers.
"The decision was good and beneficial for small traders".
"So far, over 15 lakh out of the 90 lakh registered businesses have opted for the composition scheme", he added.
Service providers can not opt for the composition scheme. Pratik Jain, leader, indirect tax, PwC, said: "Deferring reverse charge mechanism on purchases from unregistered dealer is a step in the right direction, which will avoid complex paperwork by purchasers". In the GST the one selling goods and services has to pay the tax. He tweeted, " Good and simple tax becomes even simpler. This would help small manufacturers, hoteliers and others in the state.
Data available with the government showed that apart from those with "nil" returns, close to 70% of the 32 lakh businesses which had a tax liability paid anywhere between Re 1 and Rs 33,000 in taxes.