The goods and services tax popularly called GST was launched across India, on the midnight of June 30th in a grand function inside Parliament's Central Hall. The Prime Minister Narendra Modi had called GST as Good and Simple Tax. The Government has now announced a significant revamp of the goods and services tax (GST) regime, three months after GST had been launched. This move was to address the problems faced by small traders, small scale industry and exporters.
One of the significant steps taken by the GST Council? Tax rates have been lowered on 27 products and 12 services. This move will help lakhs of small businesses and exporters in India who face problems with procedures, delay in refunds, technical glitches when filing returns.
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Take a look at the 27 items on which the GST Council has cut tax rates.
Mango slices dried, khakra and plain chapatti, Namkeens which are not put in unit containers or who bear a registered brand name, Ayurvedic/Unani/Siddha/Homeopathy which don't have a brand name, paper waste or scrap, real zari have seen GST rates reduced from 12% to 5%.
Food preparations put in unit containers for free distribution to EWS (Economically weaker sections) of Society, plastic waste/parings, rubber waste, cullet/scrap of glass, E-Waste and Biomass briquettes.
Sewing thread of manmade filaments irrespective of whether put up for retail sale, Synthetic filament yarn like nylon, polyester and acrylic, Artificial filament yarn like viscose rayon/Cupprammonium, Sewing thread of manmade staple fibres and yarn of manmade staple fibres.
Poster color, Modelling paste for children amusement, All goods falling under heading 6802 [other than those of marble and granite or those which attract 12% GST], 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, Plain Shaft Bearing 8483, Parts suitable for use solely or principally with fixed Speed Diesel Engines of power not exceeding 15HP and parts suitable for use solely or principally with power driven pumps primarily designed for handling water like centrifugal pumps (horizontal and vertical), deep tube-well turbine pumps, submersible pumps, axial flow and mixed flow vertical pumps.
See Also: Know GST and Its Calculations
Hard Rubber waste or scrap comes under this category.
Duty credit scripts comes under this category.
The GST Council has decided to clear all the tax refund claims of exporters for the month of July by 10th October 2017. All the tax refund claims of exporters for the month of August will be cleared by 18th October 2017. A 0.1% GST rate will be introduced for merchant exporters (Merchant exporters do not manufacture products but procure them and ship them overseas) on procurement. This provides them relief from full applicable GST rates.
Exporters have another piece of good news. The GST Council has allowed duty free sourcing of materials for export production till March 2018. This is very good for exporters as their working capital is free (not locked up in tax procedures) and they enjoy improved liquidity. An e-wallet will be introduced to address the liquidity problems of exporters and solve this problem permanently. A technology Company will be hired to launch the e-wallet scheme by April 2018.
The Government wants to help exporters and make Indian exports more competitive in the World market. So exports are exempted from taxes.
See also: GST advantages and disadvantages
There's good news for small businesses in India. Small businesses which have sales up to INR 1.5 crore will file quarterly tax returns instead of monthly returns. The GST Council has raised the threshold of the composition scheme from INR 75 Lakhs to INR 1 Crore. Traders, restaurants and manufacturers can opt for quarterly tax filing under this scheme. A marginal flat rate is levied.
Tax deduction at source (TDS) and tax collection at source (TCS) has been deferred to April 1st 2018 and the reverse charge mechanism until March 2018.
The measures introduced by the GST Council will help small and medium enterprises (SMEs) and exporters.
SEE ALSO: GST Tax Rates In India
FM Arun Jaitley said that “Large part of the tax collection about 94-95% comes from large taxpayers… Smaller ones have low tax burden, but it was felt their compliance burden is high,”. "Small ones should remain in the tax net for the expansion of the base, but we have significantly reduced their compliance burden." Small industries and traders had faced problems when GST was introduced on July 1st. These measures by the GST Council have brought a smile back on the faces of small businessmen, traders and exporters. Be Wise, Get Rich.
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