Facing severe criticism over the implementation of the Goods and Services Tax, the government October 6 announced a slew of measures to ease the concerns of traders, exporters and small business while slashing the rates on 27 items of common consumption, including roti, khakra, namkeens, stationery and man-made yarn, with majority switched to five percent category.
The council reduced tax rates on 27 items of mass consumption, gave relief from filing monthly tax returns to small and medium businesses and nearly exempted exporters from paying tax till March 2018.
The sweeping changes approved by the Centre-state council reflected the government's appreciation of the enormity of problems the new tax, with its complicated design, multiple rates and intrusive rules have created for businesses.
"The GST is not needed at all, soon the government will realise", he added.
The Group of Ministers, under Sushil Modi, set up to look into GSTN glitches also briefed the Council on the portal's functioning.More news: England fans 'should be proud' of team qualifying for 2018 World Cup
Gupta also welcomed the decision to introduce e-wallet, mooted by FIEO, at the introduction of the GST which will provide a permanent solution to the liquidity problem of the export sector.
It also raised the turnover threshold from Rs 75 lakh to Rs 1 crore for businesses to avail of the composition scheme that allows them to pay 1-5% tax without going through tedious formalities of filing detailed returns.
Arun Jaitely has confirmed that in the meeting it has been decided that SMEs with the total turnover of up to 1.5 crores will be allowed to file quarterly returns.
Besides, both state and central tax authorities have been directed to issue refund cheques for July by October 10 and for August by October 18. Certificate of GST payment can then be provided to service-provider in the manner TDS certificates are given in Income Tax Act.
The registered buyers from such small taxpayers would be eligible to avail input tax credit on a monthly basis.More news: How Ivanka and Donald Trump Jr. Beat Condo Fraud Rap
"The tax refunds to exports will start from October 10".
The reverse charge mechanism has been deferred till August 31, 2018. Exporters got a major relief by way of upfront exemption of GST on purchases till March 2018.
On the other hand, the Value-Added Tax collection during the same period in 2016 stood at Rs 224.40 crore in July, Rs 200.59 crore in August and Rs 203.28 crore in September. "The idea of a nominal 0.1% GST is innovative and the concept of e-wallet is a good move in the digital direction", said Siddhartha Rajagopal, executive director, TEXPROCIL.
Rates of GST on AC Restaurants will be reduced to 12% from 18% with no ITC has been discussed. Composition scheme allows traders, manufacturers and restaurants to pay tax at a flat rate of 1%, 2% and 5%, respectively, on their turnover.
The crux of his criticism was centered on the Congress' insistence that the goal of its version of the GST was to have a tax regime that would be transparent, uncomplicated.More news: European Parliament criticises UK's divisions over Brexit process