Govt Tweaks GST Formula: Here are the Five Key Takeaways
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 total tax, have been allowed to file returns and pay tax once in a quarter rather than monthly.
New Delhi: The GST Council on Friday approved 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 as the government looks to boost the economic growth.
Here are the key takeaways from the meeting:
Quarterly filing for small firms
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 total tax, have been allowed to file returns and pay tax once in a quarter rather than monthly. Traders and small firms had been up in arms against the GST regime as they found the monthly filing drill to be exhaustive. Finance minister Arun Jaitley said that the GST council has taken stock and addressed the concerns of small businesses.
GST on AC restaurants to go down
Eating out is set to become cheaper as the GST council has given its in-principle nod to cutting the rate from 18 per cent to 12 per cent. A group of ministers will study taxation regime for restaurants, especially on bifurcation on basis of AC & non-AC restaurants.
Tax rates of 27 items cut
GST rates of 27 items reviewed by the GST Council, including sliced dry mangoes, khakhra, unbranded namkeen, chapati, have been cut from 12 per cent to 5 per cent. GST rate on some stationery items, diesel engine parts has been reduced to 18% from 28%. Job works like zari, imitation, food items and printing items would attract 5 per cent tax instead of 12 per cent.
No PAN card to buy jewellery over Rs 50,000
The government also scrapped GST on gems and jewellery stating that PAN card will no longer be mandatory on the purchase of jewellery for over Rs 50,000. Offering further respite to jewellers, the meeting further concluded that any entity dealing in gems, jewellery and other high-value goods that has a turnover of Rs 2 crore or more in a financial year will not be covered under PMLA (Prevention of Money Laundering Act, 2002).
E-wallet facility for exporters
Exporters will get refunds for the tax paid by them on exports during July and August by October 18. For the remainder of the fiscal, they will operate under an exempted category paying a nominal 0.1 per cent GST. From April 1 next year, the government would also launch an e-wallet facility for the exporters to provide liquidity, Jaitley announced.