The GST Council, chaired by Finance Minister Arun Jaitley and comprising his state counterparts, at its meeting on Friday lowered tax rates on 27 items. The government pushed for the measures in the wake of outcry from small businesses and exporters becoming a political tightrope for the ruling NDA. The savoury snack lent itself to one salty joke after the other as Twitterati wondered why other snacks such as theplas and fafdas from the Prime Minister's home state were left out.
Mr Jaitley said on Friday that the rules for small businesses and exporters would be eased under the GST, a move that could provide relief to thousands of small firms. Exporters have been anxious over the delayed refunds welcomed the changes, as these would help address their liquidity problems.
"Informal sources of working capital (for smaller firms) has dried up", said Anil Bhardwaj at the Federation of Indian Micro and Small and Medium Enterprises.
While speaking to ANI, Senior Congress leader Sandeep Dikshit said, "The Congress has always demanded tax relief for exporters and also fought for the people's needs in the country". Till then, the exporters will have to pay a nominal GST of 0.1 per cent. "The e-wallet will be introduced from April next year", Jaitley added.
The GST Council has approved the creation of an e-wallet for each exporter with a notional advance refund amount. The Integrated Goods and Service Tax (IGST), which is imposed on the items consumed by the State from another State, is yet to be added in the State kitty.
The government also raised the annual turnover limit under composition scheme from Rs 7.5 million to Rs 10 million, enabling players to pay taxes at concessional rate.
While GST has not impacted consumers in any significant manner, businesses are complaining, with SMEs saying that several of them are no longer preferred suppliers to large businesses who insist that they should be registered with the IT network and be part of the tax chain.
The last date for filing of final sales returns for July in GSTR-1 form is October 10, while the date for uploading of purchase returns in GSTR-2 is October 31.
Under the composition scheme, a taxpayer is required to file summarised returns on a quarterly basis, instead of three monthly returns. This facility will be available from October onwards and past returns will have to filed in time. "So far 15.5 lakh taxpayers have opted for composition scheme", Jaitley said. The government expects improvement in the figure after the change. A group of State finance ministers will also be set up to look into the taxation structure of restaurants and what should be done as they have not reduced prices despite input tax credit.
The composition scheme is a less paperwork scheme. In the previous meeting GST Council chose to re-open the window for composition option and government saw great excitement in retailers, manufacturers and restaurant holders about the composition scheme. Service providers can not, however, opt for the composition scheme. Suppliers of services other than manufacturer of ice cream, pan masala, or tobacco; casual taxable people or a non-resident taxable person; restaurant related services; and businesses which supply goods through an e-commerce operators can not get into this category.
GST rates on unbranded medicines have also been reduced from 12 per cent to 5 per cent. Tax on parts of diesel engine has been reduced from 28 to 18 per cent.
There is good news for mid-day meal schemes as well.
Unbranded ayurvedic drugs. From 12% to 5%.
A thin, crisp cracker made with wheat flour, salt and oil, Khakhra is a popular staple in Gujarati and Rajasthani cuisine.
Items in the 28% slab include chocolates (with and without cocoa), extract or concentrate of coffee, certain non-alcoholic beverages, sweetened aerated drinks, tobacco other than bidi, marble, granite, wall paper, certain types of cement, paints, varnishes, perfumes, beauty and skin care products and after shave lotions.