GST Council to allow quarterly filing of returns for businesses with annual turnover of less than Rs 1 crore
NEW DELHI: Finance Minister Arun Jaitley addressed a press conference on GST relief measures. The council had day-long discussions on various aspects of the GST implementation. The focus being, relief for small, medium traders and exporters. Many states have backed demands to relax rules that require businesses to file three returns every month.
Highlights of Arun Jaitley’s address:
- There were many issues that were put before the council to consider. It has been 3 months since the GST was implemented. The returns have been filed for the first two months. The impact it has had on different sectors needed to be discussed
- The primary issues that states wanted to discuss was small scale sectors and exports.
- The pattern of collections cannot be clear just after the first two months as this period is a transition period
- Only the services or products provided post GST can be gauged. One of the main things that was discussed was exports. Since taxation does not apply on exports, a recommendation that was suggested was taken into consideration. The export sector’s cash liquidity gets affected this way. It will take time to fix this issue.
- From October 10 and from October 18, refunds will be processed and the exporters will be provided with their cheques from the Centre and States. This is an interim solution
- The long term solution is that an e-wallet will be created for every exporter. Preferably the implementation will be done by April 1
- A technology company would develop this facility, till then the merchant exporters would follow a nominal GST – 0.01 percent
- The refund for July and August will be provide to exporters as soon as possible. The e-wallets will be made available by April 2018
- We have made a detailed examination, in which major tax collection which comes through the bigger players, witness a larger flow. The medium players should be in the tax base but their compliance burden will be reduced
- Composition scheme will be formed under three categories. The traders with a turnover of 1 crore will pay 1 per cent, manufacturers will pay 2 per cent and restaurants will pay 5 per cent
- People with a turnover of 1.5 crores or less , which will cover 90 percent assesses, will file quarterly return instead of monthly returns
- Array of important issues were also discussed. The question of whether interstate sales are allowed for those under compliance, at this moment, it is not allowed in the country but we will try to find an answer within two weeks
- Karnataka has already implemented the e-waybill on an experimental basis and it has been a success there
- The reverse charge mechanism – when a registered dealer buys goods from an unregistered dealer. This has been deferred till March 31 to streamline its working as some traders face issues
- The service providers with a turnover of less than 20 lakh have been exempted from interstate services
- Sliced dried mangoes reduced from 12 per cent to 5 per cent, Khakra and plain chapati from 12 per cent to 5 per cent, packaged food for kids from 12 per cent to 5 per cent, unbranded namkeen from 12 to 5 per cent, unbranded ayurvedic medicines from 12 to 5 per cent, plastic waste from 18 to 5 per cent, rubber waste from 12 to 5 per cent, paper waste from 12 to 5 per cent, man made yarn which was 18 percent before is now 12 percent, this will impact ITC of textile a lot
- Flooring material reduced from 28 to 18 per cent, diesel engine parts reduced from 28 to 18 per cent, stationary has also been brought down from 28 to 18 per cent. Similarly in services, Zari works, imitation jewelry items, printing items have also been brought down to 18 to 5 per cent
- Taxation for most of the government contracts will stay at 18 per cent, but those forming high labour components, the tax has been reduced to 5 percent
- With regard to the guidance for the fitment committee: future rates will be tailored according to the increase in revenue. Our primary focus in the meeting was an increase in revenue and to create convenience in tax payment wherever possible
- In terms of quantum of tax, 90 to 95 percent of the tax will still be monthly
- The quarter which started on first of July, even for the small ones, the monthly returns will have to be filed. The switch over will be from October