[Union Minister for Finance and Corporate Affairs Arun Jaitley chairing the 22nd GST Council meeting, in New Delhi on October 06, 2017. Minister of State for Finance Shiv Pratap Shukla is also seen.]
New Delhi: Three months after the rollout of the new indirect tax regime, the GST Council on Friday made sweeping changes to give relief to Small and Medium businesses (MSMEs) on filing and payment of taxes, eased rules for exporters and cut tax rates on more than two dozen items including synthetic filament yarn.
While addressing the media after the GST Council's meeting Arun Jaitley said the Council has decided to cut GST rate on 27 commonly used items including manmade yarns of different types - a major demand by the textile industry, especially in Surat.
The synthetic filament yarns were earlier under the 18% slab but it today's meeting rate has been reduced to 12%.
Different qualities of yarn whose duty has been reduced from 18% to 12% are: Synthetic filament yarns such as nylon, polyester and acrylic, all artificial filament yarn such as viscose rayon, Cuprammonium, Sewing thread of manmade staple fibres, yarn of manmade staple fibres and sewing thread of manmade filaments.
GST Rate on real Zari work has also been reduced from existing 12% to 05%.
Besides yar, GST on unbranded namkeen, unbranded ayurvedic medicine, sliced dried mango and khakra has been cut to 5 per cent from 12 per cent.
Tax on stationery items, stones used for flooring (other than marble and granite), diesel engine parts and pump parts has been cut to 18 per cent from 28 per cent. GST on e—waste has been slashed to 5 per cent from 28 per cent.
Food packets given to school kids under Integrated Child Development Scheme (ICDS) will attract 5 per cent tax instead of 12 per cent.
All goods falling under heading 6802 - other than those of marble and granite or those which attract 12% GST, and 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 of base metal has been reduced from 28% to 18%.
GST rate on parts suitable for use solely or principally with fixed Speed Diesel Engines of power not exceeding 15HP and 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 has also been reduced from existing 28% to 18%.
GST rate on Rubber waste, parings or scrap and Plastic waste, parings or scrap has been reduced from 18% to 5% whereas, the tax rate on Hard Rubber waste or scrap has come down to 05% from 28%.
With small businesses and traders complaining about the compliance burden the new Goods and Services Tax (GST) regime has put on them, the panel decided to give option to taxpayers to avail of the so-called Composition Scheme if their turnover is less than Rs 1 crore as against the previous limit of Rs 75 lakh.
The GST Council has also constituted a panel to consider rationalising GST rate for restaurants, he added.
So far over 15 lakh out of the 90 lakh registered businesses have opted for the composition scheme.
The tax rate for traders of goods in the composition scheme is 1 per cent, while it is 2 per cent for manufacturers and 5 per cent for suppliers of food or drinks for human consumption (without alcohol).
Service providers cannot opt for the composition scheme.
The scheme allows small businesses, including eateries, to pay 1-5 percent tax without having to deal with the three- stage filing process.
It allows small taxpayers to pay GST at a fixed rate of turnover and not go through the tedious GST formalities.
The scheme cannot be opted by supplier of services other than restaurant related services; manufacturer of ice cream, pan masala, or tobacco; casual taxable person or a non- resident taxable person; and businesses which supply goods through an e-commerce operator, according to PTI.
No input tax credit can be claimed by those opting for composition scheme.
Also, the taxpayer can only make intra-state supply (sell in the same state) and cannot undertake inter-state supply of goods.
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