GST may get a tweak today: Here are 9 areas where you can expect some relief
ECONOMICTIMES.COM|
Oct 06, 2017, 01.56 PM IST
Hundred days after the Goods and Services Tax (GST) came into effect on July 1, businesses are confused, angry and helpless. Complexity of compliance is one reason. The other is the high rate of tax on certain goods and services. The government can no longer afford to ignore adverse impact of GST on businesses, now that economy is sliding and there are no concrete measures in sight to stop the slide.
When the all-powerful GST Council meets today for the 22nd time, it is expected to provide relief to businesses by tweaking rates and procedures. At the previous meeting of the GST Council in Hyderabad last month, rates were changed for 40 goods and a higher cess was imposed on large cars. It is likely to show more flexibility at today's meeting.
Enough indication of relief was given by Prime Minister Narendra Modi in his recent speech at the Institute of Company Secretaries. Following are the main areas where relief is expected:
1. Increase in the threshold limit
The council is likely to increase the threshold for the composition scheme to Rs 1 crore from Rs 75 lakh, which will allow small businesses, including eateries, to pay 1-5% tax without having to deal with the three-stage filing process.
2. Longer filing period
The council can allow for filing of quarterly returns by businesses with turnover of up to Rs 1.5 crore. Now businesses file three monthly returns and one annual return.
3. No digging into past
That's what PM Modi had assured businesses in his speech at the Institute of Company Secretaries. He had promised the government would not dig into tax matters of the previous VAT regime through any retrospective investigation of traders joining the formal economy.
4. Reverse charge mechanism
Reverse charge mechanism shifts the liability to pay the tax on the buyer rather than the seller. It can be deferred for unregistered traders.
5. Exporters
Exporters are likely to get relief in terms of faster refunds as well as compliance. Easier refund of input credit for exporters will ease the pressure on working capital of exporters.
6. Network issues
The GST Network has not been working smoothly. The council might assess the weaknesses and recommend measures for smooth functioning.
7. Food
Duty on food preparation distributed in containers to economically weaker sections under state or central government schemes is expected to be reduced from 18% to 5%.
8. Real estate
Stones used for buildings will can see a lower levy of 18%. At present, the levy is 28 per cent.
9. Leased cars
The council might reduce the burden on cars that were leased before July 1 and where the tax rate has risen to up to 50 per cent.
When the all-powerful GST Council meets today for the 22nd time, it is expected to provide relief to businesses by tweaking rates and procedures. At the previous meeting of the GST Council in Hyderabad last month, rates were changed for 40 goods and a higher cess was imposed on large cars. It is likely to show more flexibility at today's meeting.
Enough indication of relief was given by Prime Minister Narendra Modi in his recent speech at the Institute of Company Secretaries. Following are the main areas where relief is expected:
1. Increase in the threshold limit
The council is likely to increase the threshold for the composition scheme to Rs 1 crore from Rs 75 lakh, which will allow small businesses, including eateries, to pay 1-5% tax without having to deal with the three-stage filing process.
2. Longer filing period
The council can allow for filing of quarterly returns by businesses with turnover of up to Rs 1.5 crore. Now businesses file three monthly returns and one annual return.
3. No digging into past
That's what PM Modi had assured businesses in his speech at the Institute of Company Secretaries. He had promised the government would not dig into tax matters of the previous VAT regime through any retrospective investigation of traders joining the formal economy.
4. Reverse charge mechanism
Reverse charge mechanism shifts the liability to pay the tax on the buyer rather than the seller. It can be deferred for unregistered traders.
5. Exporters
Exporters are likely to get relief in terms of faster refunds as well as compliance. Easier refund of input credit for exporters will ease the pressure on working capital of exporters.
6. Network issues
The GST Network has not been working smoothly. The council might assess the weaknesses and recommend measures for smooth functioning.
7. Food
Duty on food preparation distributed in containers to economically weaker sections under state or central government schemes is expected to be reduced from 18% to 5%.
8. Real estate
Stones used for buildings will can see a lower levy of 18%. At present, the levy is 28 per cent.
9. Leased cars
The council might reduce the burden on cars that were leased before July 1 and where the tax rate has risen to up to 50 per cent.
