GST council meet: Here's what got cheaper and other major announcements

Aaron Brown
October 7, 2017

The 22 meeting of the all-powerful GST Council that began today at Vigyan Bhavan in the national capital is expected to provide some much-needed relief to traders and exporters, particularly small and medium businesses. Man-made yarn's rate was revised from 18 percent to 5 percent too.

- Government contracts involving intensive labour, like irrigation projects will be taxed at 5 per cent GST.

"Tax refunds of July and August for exporters to be processed from October 10", Jaitley said. Small scale enterprises and exports were two major concerns among them.

A Group of Ministers (GoM) shall be constituted to examine measures to make the composition scheme more attractive and will give its reports. Jaitley said the traders will now file their returns once in three months. The GST on cab lease services may get cheaper to 18 per cent from 28 per cent.

Restaurants with partial or full air-conditioning or those serving liquor attract a GST rate of 18 per cent. Restaurants with no air-conditioning in any part thereof and not serving liquor fall in the 12 per cent tax bracket.

Reacting to the development, Pratik Jain, Leader-Indirect Tax at PWC India, said: "Life will become easier for small businesses having a turnover of Rs 1.5 crore as they have the option of filing a quarterly return and payment of quarterly tax". Small and Medium Enterprises (SMEs) with Rs 1 crore turnover will have to file quarterly returns, the Finance Minister said.

While a mountain of bad loans has crimped bank lending to India's bigger companies, smaller firms have been hurt by a government move last November to stamp out "black money" - untaxed cash that oils many industries - and by GST, whose complex structure has baffled companies down the supply chain.

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- Job work items like zari will now be taxed under 5 per cent slab as against 12 per cent ealier.

The GST rate on some stationery items, diesel engine parts has also been reduced to 18 per cent from the earlier 28 per cent. It will be given a notional amount as advance refund.

SERVICES: There will be no tax on hotels and lodges with tariff below Rs 1,000.

This scheme is optional under the manufactures other than those of ice creams, pan masala and tobacco products have to pay a 2 percent tax on their annual turnover.The tax rate would be 5 percent for restaurant and 1 percent for traders.

The government is also planning to initiate the refund for exporters immediately after filing the returns.

The council will try to implement the e-way bill by April 1, 2018.

Other reports by Free-Prsite

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