Govt announces major relief in GST for exporters, small enterprises

Govt announces major relief in GST for exporters, small enterprises

Ajay Sahai, head of the Federation of Indian Export Organisation, said before the Jaitley press conference that its 25,000 small and medium-sized members had found the monthly tax drill "exhausting".

Businesses with 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 quarterly income returns and pay tax instead of the current provision of monthly filings.

The GST Council gave relief to small and medium businesses on filing and payment of taxes, eased rules for exporters and cut tax rates on various items.

Giving a major relief to small traders, the Goods and Services Tax (GST) Council on Friday raised the composition scheme limit to Rs 1 crore from present Rs 75 lakh and announced bonanza for the exporters so that they could get their blocked capital in the tax net. "Impact of GST on various sectors was discussed". "This will benefit small businesses and substantially reduce compliance costs", Jaitley said.

State Commercial Taxes Department, which keeps a record of tax collection, said the drop is not expected to continue in the future.

The Composition Window will be reopened for the traders to migrate or register to the composition scheme. "We have always seen that the Centre only resolves problems of the big businessmen but nothing for the small or tiny sectors", he said.

Friday's move, which comes almost 100 days after the indirect tax levy was rolled out on 1 July came in response to representions from India Inc over difficulties in filing returns and securing refunds. With this tweak, small businesses can file returns on a quarterly basis.

A group of state ministers, is due to its report in two weeks.

GoM to decide on bringing down the rate for AC restaurants to 12 percent. Under it, if a registered trader buys goods from unregistered supplier, the compliance of the unregistered buyer is the responsibility of the registered trader.

"The reverse charge mechanism will be reviewed by a committee of experts".

Taking stock of the problem being faced by the exporters with regards to liquidity their working capital get blocked, the GST Council has decided immediate disbursement of refunds for the month of July from October 10 and for August by October 18 onwards.

Tax refunds of July and August for exporters to be processed from October 10, says Finance Minister Arun Jaitley. "The refund will be offset later against that amount", Jaitley said The e-wallet option will be launched by 1st April, he added.

In a signal to textile traders in Gujarat, the tax rate on man-made yarn has been fixed at 12 per cent, down from 18 per cent. This facility would be available even when the vehicle is sold. Service providers, having revenues less than 20 lakh, have been included under the GST exempt list.

Of the total Rs 491.79 crore earned by the State this year, Rs 208 crore is from State GST, Rs 147 crore is Central GST, Rs 132.66 crore is Value-Added Tax on petroleum and Rs 4.13 crore is cess. Roshan Banan, managing director, Ocean Pearl Hotels, which also runs the Sagar Ratna chain of restaurants, said, "Lower taxes are welcome as it will boost spending and will be good for the restaurant business". The GST has a 4-tier structure of 5, 12, 18 and 28 per cent. Such players will not have to pay IGST and cess on imports.

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