Relief under GST as per 22nd Meeting of GST Council

The GST Council, in its 22nd meeting has recommended the following changes in the GST Regime:

 

  1. Composition Scheme:

  • The threshold limit for composition turnover has been increased to Rs. 1 Cr from existing limit of Rs. 50 Lacs.
  • The facility of availing composition under the increased threshold shall be available to both migrated and new taxpayers up to 31.03.2018.
  • Such persons who are otherwise eligible for availing the composition scheme and are providing any exempt service, shall be eligible for the composition scheme.

 

  1. Relief to SMEs:

  • Presently a person supplying inter state supplies, other job worker is required to take the GST registration compulsorily even though his turnover may be less that the threshold limit.
  • With this meeting, it has been decided to exempt those service providers whose annual aggregate turnover is less than Rs. 20 lacs (Rs. 10 lacs in special category states except J & K) from obtaining registration even if they are making inter-State taxable supplies of services.
  • It is to be noted that this exemption is only for persons supplying services and not to persons supplying goods.
  • Persons with annual turnover up to Rs. 1.50 Crs shall be required to pay tax quarterly and file quarterly returns in GSTR 1, 2 and 3 starting from Oct – Dec 2017 quarter.
  • However, till December 2017, taxpayers are required to file GSTR 3B on monthly basis only.
  • GST is also payable on the advance amount received for supply of goods or services. However, it has now been decided that taxpayers having annual aggregate turnover up to Rs. 1.5 Crs shall not be required to pay GST at the time of receipt of advances on account of supply of goods. The GST on such supplies shall be payable only when the supply of goods is made.
  • The services provided by the GTA to unregistered persons will be exempt from levy of GST.

 

  1. Reverse Charge Mechanism:

  • The reverse charge mechanism u/s 9(4) of the CGST Act and 5(4) of the IGST Act shall be suspended till 31.03.2018.
  • Kindly note that reverse charge u/s 9(4) of the CGST Act is suspended and not u/s 9(3) of the CGST Act. i.e. it has been suspended only for inward supply of goods or services from Unregistered persons. The services on which tax is required to pay under RCM as specified u/s 9(3) of the CGST Act will continue.

 

  1. For Export:

  • The major difficulties that exporters are facing is the delay in refund of IGST and thereby blockage of funds. Therefore, it was decided as below:
  • From 10.10.2017, the help up refunds for the month of July 2017 for the goods exported would begin to be paid.
  • From 18.10.2017, the help up refund for the month of August 2017 for the goods exported would begin to be paid.
  • Refunds for the subsequent months will be paid expeditiously.
  • Refunds of IGST paid on supplies to SEZs, input taxes on exports under Bond / LUT shall be processed from 18.10.2017.
  • Holders of AA (Advance Authorization), EPCG (Export Promotion Capital Goods) and EOU (Export Oriented Units) would not have to pay IGST, cess etc. on imports.
  • Also, domestic supplies to holder of AA, EPCG, EOU would be treated as deemed exports u/s 147 of CGST Act and refund of tax paid such supplies shall be given to the suppliers.
  • Merchant exporters will now have to pay nominal GST of 0.1% for procuring goods from domestic suppliers for export. This is a good initiative, however no more details have been specified right now.
  • Exporters have been exempted from furnishing of Bond / Bank Guarantee when they clear their good for export.
  • To have permanent solution for cash blockage of exporters, it has been decided that ‘‘e-Wallet’’ system will be developed in which a notional amount will be credited as if it is an advance receipt. Such credit will be used to pay CGST, SCGST, IGST etc. The balance will be refunded. Council expects such facility from 01st April, 2018.

 

  1. Other measures:

  • TDS / TCS provisions are deferred till 31.03.2018
  • The e-way bill system shall be introduced in a staggered manner with effect from 01.01.2018 and shall be rolled out nationwide with effect from 01.04.2018.
  • However, it is to be noted that till that time, e-way system of the respective state government will be in operation.
  • The last date for filing the return in FORM GSTR-4 by a taxpayer under composition scheme for the quarter July-September, 2017 shall be extended to 15.11.2017.
  • The last date for filing the return in FORM GSTR-6 by an input service distributor for the months of July, August and September, 2017 shall be extended to 15.11.2017.

The GST Rates for certain goods have been reduced and also exemption is provided to certain import of goods. For details of that Click Here.

The council has also rationalized the rates for job work on various services.

 

P Chhajed & Co LLP, a renowned and Top Chartered Accountant Firm in Ahmedabad, is a Limited Liability Partnership Form of organization, a highest form of organization a Chartered Accountancy Firm is permitted to form.

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