The Goods and Services Tax (GST) council meeting came to an end after eight hours on Friday, 5 October, after which Finance Minister Arun Jaitley addressed the nation.
He announced GST cuts for 27 products, including khakhra and chapati. Jaitley also announced that a group of ministers would review slashing the 18 percent tax for eating in AC restaurants to 12 percent, and submit a report in two weeks.
The Finance Minister said companies with a turnover till Rs 1.5 crore would have to file returns quarterly instead of monthly.
This was the 22nd meeting of the council.
Prime Minister Narendra Modi congratulated Finance Minister Arun Jaitley and the GST Council for the extensive feedback with various stakeholders, which led to the decisions announced today.
Jaitley said the Council also decided to cut GST rate on 27 common use items.
GST on unbranded namkeen, unbranded ayurvedic medicine, sliced dried mango and khakra has been cut to 5 per cent from 12 percent, while the same on man-made yarn used in textile sector has been reduced to 12 percent from 18 percent.
Tax on stationery items, stones used for flooring (other than marble and granite), diesel engine parts and pump parts has been cut to 18 percent from 28 percent. GST on e-waste has been slashed to 5 percent from 28 percent.
Food packets given to school kids under Integrated Child Development Scheme (ICDS) will attract 5 percent tax instead of 12 percent.
Job works like zari, imitation, food items and printing items would attract 5 percent tax instead of 12 percent.
Government contracts involving high amount of labour will be levied 5 percent GST instead of 12 percent in order to contain cost of those programmes, he said.
Jaitley said that the e-way bill was discussed and Karnataka is already having good experience with it. After 1 January, it will go to other states and will try to implement it by 1 April.
AC restaurants may get relief as the group of ministers will discuss if the GST is to get slashed from 18 percent to 12 percent and submit a report in two weeks.
Companies with a turnover up to Rs 1.5 crore will have to file returns quarterly instead of monthly.
Traders to pay 1 percent, manufacturers 2 percent and restaurants 5 percent under composition scheme.
Jaitley said big taxpayers, who contribute 94-95 per cent of the total taxes, will continue to file monthly returns and pay taxes on a monthly basis.
In a relief for exporters, Finance Minister Arun Jaitley said that from 10 October, refunds for July for them will be processed, and from 18 October, refunds for August will be processed and exporters will be given their cheques.
By 1 April, 2018, an e-wallet system will be put in place for the convenience of exporters and a notional amount as advance refund will be given.
GST exemption for exporters till 31 March, 2018 and a nominal 0.1 percent GST will be charged on exports.
Speaking after the 22nd GST Council meet, Finance Minister Arun Jaitley said that the pattern of collection of the GST has not been clear after two months as it was the period of transition.
Businesses with a turnover of up to Rs 1.5 crore will now have to file their returns quarterly and not monthly, as CNN News18 reported.
Sushil Kumar Modi also said the same, referring to the businesses in Bihar, 65 percent of which have a turnover of less than Rs 1.5 crore.
The government revoked the GST notification on gems and jewelry, and a separate notification will be issued separately after due consideration. Any person buying jewelry above Rs 50,000 will not be required to submit PAN or Aadhar Card details
Any entity dealing in gems, jewelry or any other high-value goods with a turnover of Rs 2 crore or more in a financial year will not be covered under the PMLA.
After the GST roll out in July, the government had notified in August that the Prevention of Money Laundering Act (PMLA) will be applicable on the jewelry industry. Under that notification, any sale of gold above Rs 50,000 required customers to furnish Know Your Customer (KYC) documents to the jeweler and also file certain returns, which was feared to have an adverse impact on sale of gold jewelry.
Finance Minister Arun Jaitley will address the nation after the GST council meeting, as CNN News18 reported.
The Andhra Pradesh Finance Minister Y Ramakrishnudu said that issues faced by small traders were discussed at the GST council meeting.
The 22nd GST Council meeting chaired by Finance Minister Arun Jaitley is underway at Vigyan Bhavan in New Delhi.
Officials in the ministry said that the Group of Ministers set up under Sushil Modi to look into GSTN glitches will also brief the Council on the portal’s functioning. Another committee under Revenue Secretary Hasmukh Adhia on issues faced by exporters is likely to submit its preliminary report to the Council.
Some measures to ease the difficulties being faced by traders owing to GST are likely to be announced after the GST Council’s meeting on 6 October.
Prime Minister Narendra Modi met Finance Minister Arun Jaitley and BJP President Amit Shah on Thursday to discuss the state of the Indian economy and steps to revive growth. Jaitley himself refused to disclose anything about the discussions with the Prime Minister and the party president.
It is understood that after the GST council meeting on Friday, there could be announcements like easier refund of input credit for exporters, deferring of reverse charge mechanism for unregistered traders, and a promise of no enquiry into the tax matters of the previous VAT regime of indirect taxes.
In his speech at the Institute of Company Secretaries in New Delhi on 5 October, the Prime Minister had promised the traders that the government would not dig into the past through any retrospective investigation of traders joining the formal economy.
Addressing concerns arising out of teething troubles in implementing the Goods and Services Tax (GST), he said his government was committed to removing the bottlenecks.
