New Delhi: The Goods and Service Tax (GST) Council on Friday raised the composition scheme threshold for businesses to Rs. 1 crore, which will allow them to pay a tax of 1 per cent to 5 per cent, without having to deal with a three-stage filing process.
The decision was taken during the 22nd GST Council meeting, which was chaired by Union Finance Minister Arun Jaitley in New Delhi.
The impact of the GST on trade, and its transition issues were discussed in the meeting held earlier today.
The panel decided to give an option to taxpayers to avail the composition scheme if their turnover is less than Rs. 1 crore as against the previous limit of Rs. 75 lakh.
Under the composition scheme, the tax rate for traders of goods will be 1 per cent, 2 per cent for manufacturers and 5 per cent for restaurants and suppliers of food or drinks.
The GST Council also announced tax relief for exporters.
"The tax refunds to exports will start from October 10. There will be a nominal 0.1 per cent GST applicable on exports," the finance minister announced, in a media briefing here, on Friday.
The small and medium-sized enterprises (SMEs) with an annual turnover of Rs. 1.5 crore will be allowed to file quarterly returns.
"Small businesses will also have to file monthly returns for three months - July, August and September - and the switchover to quarterly filing will happen from the cycle starting October 1," Jaitley added.
"Every exporter will now get an e-wallet. In the e-wallet, there would be a notional amount for credit. The refund they will eventually get will be offset from that amount. The e-wallet will be introduced from April next year," Jaitley added.
He further said that the reverse charge mechanism for transactions between registered, unregistered business has been deferred till March 31, 2018.
The Finance Minister added that the pattern of collection [of the GST] is not clear after two months, because it was a period of transition.
Prime Minister Narendra Modi, earlier on Wednesday, had also assured that the glitches would be fixed, in an hour-long speech on the Indian Economy.
Meanwhile, the GST on a few other items was reduced.
Jaitley said the GST on khakra and unbranded namkeen has been reduced from 12 per cent to 5 per cent. The tax on zari work, unbranded ayurveda medicine has been reduced from 12 to 5 per cent.
The GST rate on some stationery items, diesel engine parts has also been reduced to 18 per cent from the earlier 28 per cent.
Changes in GST Rates for Goods and IGST Rates on Imports of Goods -— Ministry of Finance (@FinMinIndia) October 6, 2017
as per decisions of 22nd GSTCouncil Meeting https://t.co/aC07kSuHRF