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The GST Council, in its 22nd Meeting which was held today in the national capital under Chairmanship of the Union Minister of Finance and Corporate Affairs, Shri Arun Jaitley has recommended the following facilitative changes to ease the burden of compliance on small and medium businesses:
HIGHLIGHTS OF JAITLEY’s SPEECH:
- 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.
- For the remainder of the fiscal, they will operate under an exempted category paying a nominal 0.1 per cent GST. From April 1, attempt would be made to launch an e-wallet facility for the exporters to provide liquidity.
- Exporters, who have been facing sluggish growth due to global slowdown, will get refunds for the tax paid by them on exports during July and August by October 18.
- Government contracts involving high amount of labour will be charged 5 per cent GST instead of 12 per cent in order to contain the cost of those programmes.
- Job works like zari, imitation, food items and printing items would attract 5 per cent tax instead of 12 per cent.
- Food packets given to school kids under Integrated Child Development Scheme (ICDS) will attract 5 per cent tax instead of 12 per cent.
- Tax on stationery items, stones used for flooring (other than marble and granite), diesel engine parts and pump parts has been cut to 18 per cent from 28 per cent. GST on e-waste has been slashed to 5 per cent from 28 per cent.
- GST on unbranded ayurvedic medicines to be reduced from 12 per cent to 5 per cent.
- Members wanted to revisit tax structure of restaurants with more than Rs 1 crore turnover, will be reviewed.
- Man-made yarn, which was taxed 18 per cent, has now been put in the 12 per cent slab. It will have an effect on textiles.
- E-way bill was discussed in the meeting, Karnataka is already having a good experience with it. After Jan 1, it will go to other states; will try to implement by April 1.
- Traders to pay 1 per cent, manufacturers 2 per cent and restaurants 5 per cent under composition scheme. The scheme 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 (sell in the same state) and cannot undertake inter-state supply of goods.
- 90 per cent of the assesses, who have turnover less than Rs 1.5 crore turnover to file quarterly returns.They will not have to pay tax according to the current provision of monthly filings.
- The limit for turnover for business to avail of in composition scheme, which allows them to pay 1-5 per cent tax without going through tedious formalities, was raised from Rs.75 lakh to Rs. 1 crore.
- We tried to resolve problems of exporters. Refunds of exporters were slow. There has been blockage in credit of exporters which affects their cash liquidity.
- Exporter refunds will be expedited, advance tax refund for exporters from October 10.
- 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.
- SMEs with Rs 1 crore turnover to file quarterly returns. The switch-over 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.
- The past 3 months were a transitional phase were a transitional phase for GST, which is why the pattern of collection (of GST) was not clear.
Full list of revised GST rates for 27 goods and 12 services
Here’s the full list of revised rates on 27 goods and 12 services.
1) Mango sliced dried
Old rate: 12%
New rate: 5%
2) Khakra and plain chapati
Old rate: 12%
New rate: 5%
3) Food preparations put up in unit containers and intended for free distribution to economically weaker sections of the society under a programme duly approved by the Central Government or any State Government, subject to specified conditions
Old rate: 18%
New rate: 5%
4) Namkeens other than those put up in unit container and, –
> bearing a registered brand name; or
> bearing a brand name on which an actionable claim or enforceable right in a court of law is available [other than those where any actionable claim or enforceable right in respect of such brand name has been foregone voluntarily
Old rate: 12%
New rate: 5%
5) Imposing GST only on the net quantity of superior kerosene oil [SKO] retained for the manufacture of Linear Alkyl Benzene [LAB]
Old rate: 18%
New rate: 18% (Clarification to be issued)
6) Ayurvedic, Unani, Siddha, Homeopathy medicines, other than those bearing a brand name
Old rate: 12%
New rate: 5%
7) Poster Colour
Old rate: 28%
New rate: 18%
8) Modelling paste for children amusement
Old rate: 28%
New rate: 18%
9) Plastic waste, parings or scrap
Old rate: 18%
New rate: 5%
10) Rubber waste, parings or scrap
Old rate: 18%
New rate: 5%
11) Hard Rubber waste or scrap
Old rate: 28%
New rate: 5%
12) Paper waste or scrap
Old rate: 12%
New rate: 5%
13) Duty credit scrips
Old rate: 5%
New rate: Nil
14) Sewing thread of manmade filaments, whether or not put up for retail sale
Old rate: 18%
New rate: 12%
15) All synthetic filament yarn, such as nylon, polyester, acrylic, etc.
Old rate: 18%
New rate: 12%
16) All artificial filament yarn, such as viscose rayon, Cuprammonium,
Old rate: 18%
New rate: 12%
17) Sewing thread of manmade staple fibres
Old rate: 18%
New rate: 12%
18) Yarn of manmade staple fibres
Old rate: 18%
New rate: 12%
19) Real Zari
Old rate: 12%
New rate: 5%
20) All goods falling under heading 6802 [other than those of marble and granite or those which attract 12 percent GST]
Old rate: 28%
New rate: 18%
21) Cullet or other waste or scrap of Glass
Old rate: 18%
New rate: 5%
22) Fittings for loose-leaf binders or files, letter clips, letter corners, paper clips, indexing tags and similar office articles, of base metal; staples in strips (for example, for offices, upholstery, packaging), of base metal
Old rate: 28%
New rate: 18%
23) Plain Shaft Bearing 8483
Old rate: 28%
New rate: 18%
24) Parts suitable for use solely or principally with fixed Speed Diesel Engines of power not exceeding 15HP
Old rate: 28%
New rate: 18%
25) Parts suitable for use solely or principally with power driven pumps primarily designed for handling water, namely, centrifugal pumps (horizontal and vertical), deep tube-well turbine pumps, submersible pumps, axial flow and mixed flow vertical pumps
Old rate: 28%
New rate: 18%
26) E-Waste
Old rate: 28/18 %
New rate: 5%
27) Biomass briquettes
Old rate: 18 %
New rate: 5%
The Council also rationalised GST rates on 12 job work services:
# Job work services in relation to all products falling in Chapter 71 (including imitation jewellery) – 5%
# Job work services in relation to food and food products falling under Chapters 1 to 22 of the HS Code (except packing of processed milk into packets) – 5%
# Job work services in relation to products falling under Chapters 23 of the HS Code except dog and cat food put up for retail sale – 5%
# Job work in relation to manufacture of umbrella – 12%
# Job work in relation to manufacture of clay bricks falling under CTH 69010010 – 5%
# Services by way of printing on job work basis or on goods belonging to others in relation to printing of all goods falling under Chapter 48 or 49, which attract GST @ 5% or Nil – 5%
# Services by way of printing on job work basis or on goods belonging to others in relation to printing of all goods falling under Chapter 48 or 49, which attract GST @ 12% – 12%
# Services by way of printing on job work basis or on goods belonging to others in relation to printing of goods falling under Chapter 48 or 49, other than those covered by (6) and (7) above – 18%
# Services by way of printing in relation to printing of all goods falling under Chapter 48 or 49, which attract GST @ 5% or Nil, where only content is supplied by the publisher and the physical inputs including paper used for printing belong to the printer – 12%
# Services by way of printing of all goods falling under Chapter 48 or 49 which attract GST @12%, where only content is supplied by the publisher and the physical inputs including paper used for printing belong to the printer – 12%
# Services by way of printing of all goods falling under Chapter 48 or 49 which attract GST @18% or above, where only content is supplied by the publisher and the physical inputs including paper used for printing belong to the printer – 18%
Professionals, tax consultants, accountants can use the below links to be updated on Goods and Services Tax
- Tutorials for Goods and Services Tax
- Practice Test on Goods and Services Tax to assess your knowledge
- Certification Course on Goods and Services Tax
