Exporters relieved as government moves to lower GST burden

Exporters relieved as government moves to lower GST burden

Exporters relieved as government moves to lower GST burden

Addressing the National conclave on "GST, A Catalyst for Economic Growth and Ease of Doing Business" organised by the PHD Chambers of Commerce and Industry here, Kumar claimed that until Friday, 26.3 lakh new tax payers were added to the system.

As per the data available from the department, from July 1 till date, the department has earned Rs 491.79 crore revenue through GST (including Value-Added Tax on petroleum), which is 22 per cent less as compared to similar period- July-September 2016, wherein Rs 628.27 crore were deposited with the state government. Similarly, the reverse charge mechanism for transactions between registered and unregistered businesses has been deferred till March 31, 2018.

Speaking to media persons after the meeting, Jaitley said food packets used in the ICDS scheme, plastic and rubber wastes will now be taxed at the rate of 5 per cent instead of 18 per cent. "The e-wallet option will be launched by 1st April", Jaitley said.

Exporters were exempt from paying certain taxes on inputs under previous rules, but the new system required them to pay those taxes and then seek refunds, which takes time and has dried up cash availability.

The major issues affecting the export sector related to delays in refunds of IGST and input taxes on exports and working capital blockage as exporters have to upfront pay GST on inputs and capital goods for export production or for procuring goods for export. Immediate relief is being given by extending the advance authorization (AA), export promotion capital goods (EPCG) and 100 per cent export-oriented unit (EOU) schemes to sourcing inputs from overseas as well as domestic suppliers.

Instead of monthly return the taxpayers with turnover Rs. 1.5 crore, will now be allowed to file quarterly returns.

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The panel made a decision to give an option to taxpayers to avail the composition scheme if their turnover is less than Rs. 1 crore as against the previous limit of Rs. 75 lakh.

Bringing significant relief to the small and medium businesses and exporters, the Goods and Services Tax (GST) Council on Friday finalized a slew of relaxation measures.

Tax rate on man-made yarn was reduced to 12 percent from the current 18 percent, which is expected to provide relief to the textile industry. Exporters will have e-wallets from April 1, 2018, for refunds. In the e-wallet, there would be a notional amount for credit. Lowering compliance cost for SMEs to widen the tax base implementation of GST burdened the SME sector following increase in compliance cost on account of filing three-monthly returns and one-annual return (total 37 returns per annum).

The tax rate on services, including government contracts involving large labour, job work services in relation to imitation jewellery, some food and food products has been reduced from 12% to 5%.

The GoM would give its recommendations within two weeks. It has now been chose to exempt those service providers whose annual aggregate turnover is less than Rs 20 lakh from obtaining registration even if they are making inter-state taxable supplies of services.

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