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We refer to the 22nd GST Council ('Council') meeting held in New Delhi on 6 October 2017 wherein various measures were recommended to ease the compliances for the taxpayers in the GST regime and GST rates of certain goods and services to be re-visited. For ease of reference, on perusal of the Press Releases issued pursuant to the meeting, we have summarized below key decisions taken by the Council:

Composition Scheme:

The threshold limit for availing the composition scheme is proposed to be increased as under:


Sr. No.

States

Existing threshold (INR)

Revised threshold (INR)

1.

Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura and Himachal Pradesh ('special category states')

50 Lakhs

75 Lakhs

2.

Jammu and Kashmir and Uttarakhand ('special category states')

50 Lakhs

1 Crore

3.

All other states and union territory

75 lakhs

1 Crore


The facility to avail composition scheme under the revised threshold to be available to both migrated and new taxpayers up to 31 March 2018. The option once exercised to become operational from the first day of the immediately succeeding month

New taxpayers opting for the revised scheme to file return in form GSTR-4 for that portion of the quarter from when the scheme becomes operational and for the preceding period, return to be filed as a normal tax payer

Supplier of exempted services along with supply of other goods or services would also be eligible for composition scheme subject to fulfilment of other prescribed conditions

Relief for Small and Medium Enterprises

Exemption to service providers undertaking inter-state supply of services and having turnover less then INR 20 Lakhs (INR 10 lakhs in special category states except Jammu and Kashmir) from obtaining mandatory registration; it is relevant to highlight here that there is no mention about similar exemption for interstate supply of goods

Relaxation in the periodicity of tax payments and return filings for Small and Medium Enterprises ('SME's') with turnover less then INR 1.5 crores from monthly basis to quarterly basis effective from October-December 2017 quarter; due dates for this purpose to be announced shortly

For the interim period, the requirement to file summary return in GSTR-3B for all tax payers (including those nominated to file returns on quarterly basis) to continue on monthly basis upto December 2017 along with form GSTR 1, 2 and 3 for the months of July, August and September 2017

Reverse charge mechanism prescribed for payment of GST on supplies from un-registered persons to be suspended upto 31 March 2018

Requirement to pay GST on advances received for supply of goods by SME's (having annual aggregate turnover less then INR 1.5 crores) proposed to be discontinued. Accordingly, in such cases, GST to be paid only at the time of supply of goods; it is relevant to highlight here that there is no mention about similar exemption for supply of services

Exemption to services provided by a Goods Transport Agency ('GTA') to unregistered persons

Relief for exporters

The Council has proposed following timelines to ensure faster tax refund to exporters to mitigate the issue of blockage of working capital due to delayed refunds:


Sr No

Scenario for Refund

Refund to be issued from

A

IGST paid goods exported outside India in July

10-Oct-17

B

IGST paid goods exported outside India in August

18-Oct-17

C

IGST paid on supplies to SEZs and of input taxes on exports under Bond/LUT

18-Oct-17


The Council has approved two proposals to prevent cash blockage in the form of immediate relief and long term support for exporters:

  • Immediate relief by extending the Advance Authorization (AA) / Export Promotion Capital Goods (EPCG) / 100% EOU schemes to sourcing inputs etc. from abroad as well as domestic suppliers to allow such scheme holders relief from payment of IGST, Cess etc on imports
  • Domestic supplies to holders of AA / EPCG and EOUs to be treated as deemed exports and refund of tax paid on such supplies to be given to the supplier
  • "E-Wallet" facility to be introduced with effect from 1 April 2018 as a long term solution for cash blockage whereby a notional amount (as an advance refund) would be credited to "E-Wallet" to be used for payment of GST; details in this regard to be worked out soon
  • 0.1% nominal GST to be levied on goods procured by Merchant exporters from domestic suppliers for export; details in this regard to be released soon
  • Exemption from furnishing Bond and Bank Guarantee when goods are cleared for export
  • GST on sale-purchase of duty credit scrips is reduced from 5% to 0%.
  • GST on bunker fuel is reduced to 5% for both coastal vessels and foreign going vessels
  • Specified banks and PSUs will be allowed to import Gold without payment of IGST and the same may be supplied to exporters as per a scheme similar to Advance Authorization

Other Key decisions


Sr. No.

Particulars

GST Council recommendation

1.

TDS and TCS

Registration and operationalization of TDS/TCS provisions to be postponed till 31 March 2018

2.

E-Bill system

To be introduced on experimental basis from 1 January 2018 and to be rolled out nationwide with effect from 1 April 2017

 3.

Extension of due dates

a. GSTR-4 (July-September 2017)

b. GSTR-6 (July to September 2017

15 November 2017

15 November 2017

4.

Invoice rules

Provision for relief to certain class of registered persons


Changes in rate of taxes for goods: The Council has reduced GST rate on certain goods (to be effective once notified) including tax on imports. The details of key changes are as under:


Sr No

HSN Code

Description

Present GST Rate (%)

Proposed GST Rate (%)

1

4907

Duty credit scrips

5%

NIL

2

5401

Sewing thread of manmade filaments, whether or not put up for retail sale

18%

12%

3

5402, 5404, 5406

All synthetic filament yarn, such as nylon, polyester, acrylic, etc

18%

12%

4

5403, 5405, 5406

All artificial filament yarn, such as viscose rayon, Cuprammonium

18%

12%

5

5408

Sewing thread of manmade staple fibres

18%

12%

6

5509, 5510, 5511

Yarn of manmade staple fibres

18%

12%

7

8483

Plain Shaft Bearing

28%

18%

8

84

Parts suitable for use solely or principally with fixed Speed Diesel Engines of power not exceeding 15HP

28%

18%

9

84 or 85

E-Waste

28%/18%

5%


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Category GST, Other Articles by - Sandeep Jadhav 



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