Remove disparities in GST: CAIT tells GST Council

Remove disparities in GST: CAIT tells GST Council

Bringing significant relief to small and medium businesses and exporters, the Goods and Services Tax (GST) Council on Friday finalised a slew of relaxation measures. The panel also raised the annual revenue threshold below which businesses won't need to maintain detailed accounts and cut tax rates on a number of goods. Ajay Sahai, head of the Federation of Indian Export Organisation, said before the Jaitley press conference that its 25,000 small and medium-sized members had found the monthly tax drill "exhausting".

The Group of Ministers, under Sushil Modi, set up to look into GSTN glitches also briefed the Council on the portal's functioning.

The panel made a decision to reduce tax rates for items including diesel engine parts, man-made yarn, ready-to-eat snacks, plastic and paper waste. "However, while the small players have a low tax burden, they have a high compliance burden. Thus, reducing their GST compliance cost", says Harpreet Singh, Partner - Indirect Taxes, KPMG India.

India slashed tax rates on 27 items and extended the period for small businesses to file returns in a bid to reverse the economic sentiment dampened by a chaotic roll out of the new nationwide sales tax.

Those who have Rs. 1.5 crore turnover and that will cover about 90 per cent SSCs and are outside the composition scheme, they will file quarterly returns instead of monthly returns. "The Council has also decided that each exporter will get an e-wallet in which a nominal sum will be deposited for tax credit purposes, which will be offset against the credit refund when it happens". E-way Bill should be levied only on inter-state sale having a value of more than Rs 1 lakh.

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Prime Minister Narendra Modi, while defending his government's track record in managing the economy, on Wednesday said that both demonetisation and the implementation of GST were structural reforms.

The Chief Minister said that unlike other states, Goa had fully opened up to GST.

It is very likely that the GST council will discuss the issues of four tax slabs.

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. Further, for exporters reeling under tight liquidity conditions due to tax refund claims aggregating to Rs 65,000 crore stuck with the government, the GST Council may take immediate steps to speed up the refunds or relax the working capital requirements, in addition to introducing e-wallet facility as well.

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