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Government gives relief to traders and exporters with a reduction in GST rate

Three months post the rollout of GST, the council made significant changes which gave relief to the small and medium businesses on the filing and payment of taxes. With months of speculation before the implementation of the new regime, the Government laid out the Goods and Services Tax in order to build One nation, one tax. But within three months of its rollout, the GST council had to make certain changes specific to goods and services in terms of the rate of taxation. The relief in taxation has had a significant impact across various traders. It eased rules for the exporters and cut tax rates for more than two dozen items. Businesses with an annual turnover upto Rs.1.5 crore, which build 90% of the taxpayer base but only pay about 6% of the total tax, are now allowed to file quarterly income returns and pay tax instead of the current provision of monthly filings. Further, an e-wallet will also be created for every exporter by the end of March 2018 in order to carry forward the process. Until then, the exporters will be required to pay a nominal GST of 0.1 per cent.

One of the biggest compliance issues of the new tax system is the cumbersome return filing process which requires the traders to file three returns each month. About 90% of the taxpayers will be benefitted by this significant change. The filers have complained about the surging compliance charges and the portal issues with the GST network.

Further, the threshold for the composition scheme in GST has been increased from Rs.75 lakh to Rs.1 crore for businesses to avail the benefit of the composition scheme. Under this scheme, a taxpayer is required to file the summarized returns on a quarterly basis instead of the three monthly returns. The traders, manufacturers and restaurants will pay 1%, 2% and 5% respectively under the composition scheme. Service providers cannot opt for the same. The council also reduced the rates for various goods and services. This includes a total of 27 items consisting of unbranded namkeem, unbranded ayurvedic medicines, ICDS food packages, handmade yard, khakra chapatti and the waste obtained from paper, plastic and rubber have been brought under the 5% slab. For services, job work like imitation jewelry, zari work and printing items have also been added to the slab. The roll out of the e way bill has been deferred to the end of March 2018. This issue has been under consideration for a long period.
The government also revoked GST notification on gems and jewelry bringing forth a few more reforms. The government has mentioned that any person buying jewelry above Rs.50, 000 will not be required to furnish their PAN card and Aadhar card details. Also, those entities dealing in jewelry, gems and other high value goods with an annual turnover of more than Rs.2 crore will no longer by under purview of the Money Laundering Act.

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