Goods and Service Tax (GST) which has been rolled out three months ago has been revised by the GST Council in a meeting that we held on Friday. According to the new GST norms, filing and payment of taxes by small and medium businesses seems to have been relieved. Moreover, tax rates on 27 common items have also been cut easing the rules for exporters.
Arun Jaitley, the Finance Minister of India, said after the meeting “GST Council has considered the implementation experience of the last three months and gave relief to small traders. Compliance burden of medium and small taxpayers in GST has been reduced.” The new GST norms have been introduced in effect to various complaints on GST burden faced by small and medium businesses. Goods and Service Tax which replaced more than 10 national and state taxes was intended to be an easy indirect tax regime, however it has not met the criteria that could satisfy all types of businesses until now with the changes made. Earlier to this, Prime Minister Narendra Modi enquired about the compliance burden of GST on small and medium businesses and later asked the GST council to lookup into the issue faced by these enterprises.
Here is the list of the new GST norms recommended by the Finance Minister:
1. The composition scheme threshold which is the annual aggregate turnover of taxpayers has now been changed to Rs 1 crore from an earlier figure of Rs 75 lakhs.
2. If in case such people can provide any exempt service then they will also be considered eligible for the composition scheme.
3. A Group of Ministers will be constituted to examine measures in order to make the composition scheme more attractive.
For small and medium businesses,
1. Service providers who have an aggregate turnover of less than 20 lakhs (Rs 10 lakhs in special category states, except for Jammu & Kashmir) are exempted even if they currently make inter-state taxable services supply.
2. Services provided by Goods Transport Agencies (GTA) to unregistered person will be exempted from GST. This step has been taken to reduce the burden on small unregistered businesses.
3. The reverse charge mechanism under sub-section (4) of section 9 of the CGST Act, 2017 and under sub-section (4) of section 5 of the IGST Act, 2017 are temporarily suspended till March 31st, 2018 until when they will be reviewed by an expert committee.
4. Tax payers who have an aggregate turnover of up to Rs 1.5 crore need not pay GST at the time of receiving advances on account of goods supply.
GST Council also changes the tax rates on 27 items of regular consumption. Below is the list of the changed rates:
All these changes made to GST are going to come into effect from the next week. We hope this does the expected good to the small and medium businesses.