The Goods and Services Tax (GST) Council hold its 22nd meeting on Friday, October 6, 2017. In this meeting, various decisions taken in the favour of GST taxpayers. Did you know? GST implemented from July 1, 2017 to replace 17 Central and State taxes with one tax head called GST.
As per discussions held in the 22nd GST Council Meeting held under Chairmanship of Union Finance Minister Shri Arun Jaitley on 6th October, 2017, the following changes have been recommended.
Analysis of Decisions taken by GST Council
GST for Exporters:
Exporters of India are not required to pay GST tax. They have to compete with other traders in the world market and therefore, Indian Govt. has exempted export from the GST tax regime. Further, an exporter cannot export taxes because it make product non-competitive in the export market.
Electronic refund mechanism for exporters will take some time. Therefore, GST council has now decided that exporters shall get refund through cheque for from 10th October for the month of July 2017 and from 18th October for the month of August 2017.
Every exporter will now get an e-wallet from the month of April 2018. In this e-wallet, there would be a notional amount as advance refund for credit. The refund they will eventually get will be offset from that amount. Note that there will be a nominal 0.1 percent GST applicable on exports.
Turnover Limit for Composition Scheme:
Composition scheme limit has been increased from ₹75 lakh to ₹1 crore. This turnover threshold for Jammu & Kashmir and Uttarakhand shall be ₹1 crore. However, the threshold of turnover for other special category States shall be ₹75 lacs instead of current threshold of ₹50 lacs.
The facility of availing composition under the increased threshold shall be available to both migrated and new taxpayers up to 31st March, 2018.
If a person otherwise eligible for availing the composition scheme but is providing any exempt service, shall be eligible for the composition scheme.
In this GST Council meeting, a big relief have been provided to Small and Medium Enterprises (SMEs) for making inter-state taxable supplies.
Turnover Limit for GST Registration:
Those service providers whose annual aggregate turnover is less than ₹20 lacs from obtaining GST Registration even if they are making inter-State taxable supplies of services. However, if you are service provider from special category states except Jammu and Kashmir then the annual aggregate turnover limit would be ₹10 lacs.
Turnover Limit for GST Return:
Taxpayers having aggregate turnover up to ₹1.5 crores shall be required to file quarterly returns in FORM GSTR-1, GSTR-2 and GSTR-3 and pay GST taxes only on a quarterly basis. This facility has been provided for small and medium businesses from Third Quarter of this Financial Year i.e. October-December, 2017. Note that taxpayers with turnover above ₹1.5 crore shall continue to file their GST return on monthly basis.
However, the registered buyers from such small taxpayers would be eligible to avail Input Tax Credit (ITC) on a monthly basis. Meanwhile, all taxpayers are required to file electronically FORM GSTR-1, GSTR-2 and GSTR-3 for the months of July 2017, August and September 2017. In other words, small businesses will also have to file monthly returns for three months – July, August and September – and the switchover to quarterly filing will happen from the cycle starting October 1.
Reverse Charge Mechnism:
The reverse charge mechanism u/s 9(4) of the CGST Act, 2017 and under section 5(4) of the IGST Act 2017 shall be suspended till 31st March, 2018 and will be reviewed by a committee of experts.
GST on Advance Received:
Taxpayers having annual aggregate turnover up to ₹1.5 crores 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.
In other words, if your annual turnover exceeds ₹1.5 crores then you have to pay GST on advance received for supply of Goods.
Services to Unregistered Person:
The services provided by a Goods Transport Agency (GTA) to an unregistered person shall be exempted from GST tax regime. Currently, GTA are not willing to provide services to unregistered persons and thefore this decision has been taken by the GST Council.
Other decisions made at GST Council Meet are as follows:
- Registration and operationalization of TDS/TCS provisions shall be postponed 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.
- The last date for filing GST 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 GST return in FORM GSTR-6 by an Input Service Distributor(ISD) for the months of July, August and September, 2017 shall be extended to 15.11.2017.