New Delhi: On Friday, at the 22nd meeting of Good and Service Tax Council, many changes are made in the tax rates of various sectors. Below are the changes in tax rates.
- On cloth tax rate reduced to 5% from 12%.
- On 60 items tax rate reduced to 5% from 12%.
- Restaurant Tax reduced to 12% from 18%.
- GST rate on stationary items, diesel engine reduced to 18% from 28%
- Tax on food items reduced from 12% to 5%
Other amendments made are
- Return to be filed once in the quarter not monthly basis.
- E-way bill provisions deferred till April 2018.
- Reverse charge to be abolished till 31.03.2018.
Relief for SMEs, threshold for composition scheme raised
In a relief to small and medium enterprises, the GST Council on Friday raised the turnover threshold to Rs 1 crore for businesses to avail of the composition scheme that allows them to pay 1-5 per cent tax without going through tedious formalities.
With small businesses and traders complaining about the compliance burden the new Goods and Services Tax (GST) regime has put on them, the panel decided to give option to taxpayers to avail of the so-called Composition Scheme if their turnover is less than Rs 1 crore as against the previous limit of Rs 75 lakh.
The GST Council, headed by Finance Minister Arun Jaitley, at its 22nd meeting reached consensus on increasing composition threshold for SMEs, Andhra Pradesh Finance Minister Y Ramakrishnudu said.
Kerala Finance Minister Thomas Isaac said exporters will get IGST relief and e-wallet facility for six months.
The GST Council has also constituted a panel to consider rationalising GST rate for restaurants, he added.
So far over 15 lakh out of the 90 lakh registered businesses have opted for the composition scheme.
The tax rate for traders of goods in the composition scheme 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 (without alcohol).
Service providers cannot opt for the composition scheme.
The scheme allows small businesses, including eateries, to pay 1-5 percent tax without having to deal with the three- stage filing process.
It allows small taxpayers to pay GST at a fixed rate of turnover and not go through the tedious GST formalities.
The scheme cannot be opted by supplier of services other than restaurant related services; manufacturer of ice cream, pan masala, or tobacco; casual taxable person or a non- resident taxable person; and businesses which supply goods through an e-commerce operator.
No input tax credit can be claimed by those opting for composition scheme.
Also, the taxpayer can only make intra-state supply (sell in the same state) and cannot undertake inter-state supply of goods.