After completing the critical first 100 days for GST regime, PM Modi along with Finance Minister Arun Jaitley and other prominent Ministers took a review of the situation.
Based on feedback from the citizens and business communities from all over India, the GST Council has decided to make some sweeping changes in the overall GST rules and regulations.
While SMEs and Small Businesses have received huge relief, when it comes to filing of tax returns, tax slabs of 27 Products and 12 services have been changed, bringing cheers from the market.
No doubt GST has now become even more simpler, targeted.
Early Christmas For SMEs As GST Filing Rules Changed!
Small traders and businesses were the ones who faced the biggest challenge in the GST regime; and this challenge was monthly filing of returns. Not every small business can afford to hire accountants, and things were becoming unbearable for them.
Understanding their plight, Govt. has now decided to allow quarterly filing of returns, rather than monthly returns for those businesses, whose annual turnover is less than Rs 1.5 crore.
As per Govt. estimates, about 90% of registered businesses in India have turnover of less than Rs 1.5 cr per year, who pay between 5-6% of overall tax generated in the country.
Thus, this single decision will benefit this huge mass of SMEs and small businesses.
Some analysts have described this decision as an early Christmas for SMEs and small traders.
Minister Jaitley admitted: “While taxes paid by small and medium tax payers are small, the compliance burden on them was huge,”
Besides, those businesses which have turnover of less than Rs 20 lakh have been exempted from registering for GST as well. (those who are providing inter-state services; for Jammu and Kashmir, this limit is Rs 10 lakh)
Besides, in a huge relief to ecommerce industry, the Tax Deducted At Source rule has also been deferred as of now, and a decision would be taken in April, 2018.
And, eating out can become cheaper, as the GST Council will now review the applicable tax structure, and may soon announce the revision.
GST Tax Slab Reduced For 27 Products!
Understanding that increase in GST for some essential products have caused mayhem all around, Govt. has decided to reduce GST tax slabs for 27 products and 12 major services.
The 27 products who GST slabs have been reduced are:
1) Mango sliced dried: Now 5%, instead of 12%
2) Khakra and plain chapati: Now 5%, instead of 12%
3) Food preparations put up in unit containers and intended for free distribution to economically weaker sections of the society under a programme duly approved by the Central Government or any State Government, subject to specified conditions: Now 5%, instead of 18%
4) Namkeens other than those put up in unit container and, –
> bearing a registered brand name; or
> bearing a brand name on which an actionable claim or enforceable right in a court of law is available [other than those where any actionable claim or enforceable right in respect of such brand name has been foregone voluntarily: Now 5%, instead of 12%
5) Imposing GST only on the net quantity of superior kerosene oil [SKO] retained for the manufacture of Linear Alkyl Benzene [LAB]:
Old rate: 18%
New rate: 18% (Clarification to be issued)
6) Ayurvedic, Unani, Siddha, Homeopathy medicines, other than those bearing a brand name: Now 5%, instead of 12%
7) Poster Colour: Now 18%, instead of 28%
8) Modelling paste for children amusement: Now 18%, instead of 28%
9) Plastic waste, parings or scrap: Now 5%, instead of 18%
10) Rubber waste, parings or scrap: Now 5%, instead of 18%
11) Hard Rubber waste or scrap: Now 5%, instead of 28%
12) Paper waste or scrap: Now 5%, instead of 12%
13) Duty credit scrips: Now 0%, instead of 5%
14) Sewing thread of manmade filaments, whether or not put up for retail sale: Now 12%, instead of 18%
15) All synthetic filament yarn, such as nylon, polyester, acrylic, etc: Now 12%, instead of 18%
16) All artificial filament yarn, such as viscose rayon, Cuprammonium: Now 12%, instead of 18%
17) Sewing thread of manmade staple fibres: Now 12%, instead of 18%
18) Yarn of manmade staple fibres: Now 12%, instead of 18%
19) Real Zari: Now 5%, instead of 12%
20) All goods falling under heading 6802 [other than those of marble and granite or those which attract 12 percent GST]: Now 18%, instead of 28%
21) Cullet or other waste or scrap of Glass: Now 5%, instead of 18%
22) Fittings for loose-leaf binders or files, letter clips, letter corners, paper clips, indexing tags and similar office articles, of base metal; staples in strips (for example, for offices, upholstery, packaging), of base metal Now 18%, instead of 28%
23) Plain Shaft Bearing 8483: Now 18%, instead of 28%
24) Parts suitable for use solely or principally with fixed Speed Diesel Engines of power not exceeding 15HP: Now 18%, instead of 28%
25) Parts suitable for use solely or principally with power driven pumps primarily designed for handling water, namely, centrifugal pumps (horizontal and vertical), deep tube-well turbine pumps, submersible pumps, axial flow and mixed flow vertical pumps: Now 18%, instead of 28%
26) E-Waste: Now 5%, instead of 18/28%
27) Biomass briquettes: Now 5%, instead of 18%
Besides, Tax dept. will now create a special wallet, wherein all tax inputs and credits would be automatically deposited, as per the tax provisions.
Do you think these sweeping changes made in the GST regulations will help small businesses? Do let us know your views, by commenting right here!