GST Council reduces tax rates on 27 items, approves quarterly return filing
In a major relief to common man, small traders and exporters, the GST Council has reduced tax rates on 27 items and allowed the filing of returns on the quarterly basis. The GST Council meeting held under the Chairmanship of Union Finance Minister Arun Jaitely in New Delhi yesterday decided to reduce the GST rates on dried mangoes, Khakhra, plain chapatis, unbranded Namkeen, unbranded ayurvedic medicines and paper wastes to 5 percent from 12 percent.
Briefing reporters after the meeting, Mr Jaitley said, food packets used in ICDS scheme, plastic and rubber wastes will now be taxed at 5 percent instead of 18 percent. Man-made Yarn will be taxed at 12 percent instead of 18 percent. Mr Jaitley said, stationary items, flooring stones other than marble and granites, parts of diesel engine and pumps will now attract 18 percent GST against the present rate of 28 percent.
Moreover, job works related to zari embroidery, imitation jewellery, food items, printing, and government contracts involving high element of labour will all attract GST at the rate of 5 percent.
The GST Council also approved the quarterly filing of returns for businesses with turnover upto 1.5 crore rupees besides raising the threshold for composition scheme from 75 lakh rupees to one crore rupees. Mr Jaitley said that under composition scheme, traders will now pay one percent, manufacturers two percent and restaurants five percent.
He said, exporters will start getting refunds of their input credit for the month of July from 10th of October and for August from 18th of this month. This is an interim arrangement. Long-term solution is to create an e-wallet for every exporter in which a notional amount would be credited as advance refund and through this, the IGST or GST will be paid. This credit will be offset from their actual refund. This arrangement will be developed by an appropriate technology company by April 1, 2018.
The GST Council also recommended setting up Group of Ministers to examine key rate cut issues regarding AC restaurants. The committee will come up with a mechanism to reduce GST on AC restaurants in ten days. Mr. Jaitley said, the Council also discussed e-way bill. He said, Karnataka is already having good experience with it and after first of January it will go to other states.