GST council announces relief for small firms, exporters and rate cuts for many groups

After three months of implementation of Goods and Services Tax(GST), the powerful GST council met to revisit compliance rules for business and has introduced structural changes in the new national tax regime.

Arun Jaitley, the Finance Minister, said that in the GST council meeting, “It’s been three months since the GST has been roll out. GST returns have been filed for first two months as well. So now is the time to determine its effect on various trade and transitions.”

In order to make it easier for exporters to claim tax refund, the GST council on Friday has allowed them to file quarterly returns instead of monthly submissions by expanding the Composition Scheme for paying GST.

Considering the liquidity problem that is faced by the exporters, the Council has decided to immediately start the refund procedure for the month of July by 10th October while exporters can get a refund of August by 18th October.

The GST council has decided to increase the limit of the composition scheme from current 75 lakh to Rs 1 crore. With this amendment, the small businesses can now file returns on a quarterly basis. According to the current data, over 15 lakh out of 90 lakh has opted for the composition scheme.

In the composition scheme, the rate of traders is 1 per cent, while it is 2 per cent for manufacturers and 5 per cent for suppliers of food or drinks for human consumption. Those who have opted for composition scheme are not eligible for availing input tax credit.

The GST Council has also revised GST rates. GST on unbranded namkeen, unbranded ayurvedic medicine, sliced dried mango and Khakra has been cut to 5 per cent from 12 per cent, while the same on man-made yarn used in textile sector has been reduced to 12 per cent to 18 per cent. The integrated child development scheme(ICDS) which give food packets to school kids will now attract 5 per cent GST instead of 12 per cent.

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