The Recent Changes Made In GST Rates By Government Of India


The recent changes in GST rates

There have been specific rate changes brought forth in the latest meeting of the GST council on 6th October 2017. The changes have been summarized as follows

Relief for small business owners:

  1. The small businesses with a turnover of 1.5 crores or less have been exempted from filing monthly GST and have to register GST return quarterly.
  2. The small business has to file the three consecutive months of July, August, and September and will be switching over to quarterly filing only after filing these three-month

Exemptions introduced for service providers:

  1. If the service provider has an aggregate turnover of Rs.20 lakhs or less than that except the state of Jammu &Kashmir where the turnover amount is restricted to Rs.10 lakhs, they not required to register for GST registration even if they are providers of the domestic supply of services.
  2. If the services are provided by a Goods Transport Agency(GTA) to an unregistered person, it shall be exempted from GST.
  3. The small business service provider is also required to file the three-consecutive month return of July, August, and September and then switch to the process of quarterly filing.
  4. The application of TDS/TCS provisions has been delayed to 31.03.2018.

The changes effected for Exporters:

  1. The dates for refund checks have been divided into two batches:
  • Refund checks for July exports are to be refunded by Oct 10 and refund checks for August exports are to reimbursed by Oct 18.
  1. The ministry is planning to introduce “E-wallet” for exporters with an estimated amount of credit preloaded in the wallet and the refund amount earned will be deducted from the preloaded credit. It is to be introduced from April 2018.
  2. The merchant exporters are required to pay a small amount of 0.1% GST of the exported goods thereby enabling their suppliers to claim ITC.

The changes introduced in Composition scheme:

  1. The person who already eligible for the Composition scheme and are providing any exempt services from the fold of GST are automatically qualified for the Composition Scheme.
  2. The minimum eligibility has been raised from Rs.75 lakhs to a 1 crore.
  3. The rates of payment for traders is 1%, manufacturers 2%, and restaurants 5%.
  4. Due date of GSTR-4 of the July-September quarter has been extended till 15th November 2017.

Reverse Charge Mechanism(RCM) under Section 9(4) for purchases made from the unregistered dealer has been made inactive.

Section 9(3) of RCM is still in effect. The initial expenses coming under this section are Transportation charges, Legal expenses and Services received from Directors and other notified expenses under this section.

The suspension of Section 9(4) is active immediately from the official release of the Government Order.

The businesses having their annual turnover of less than  Rs.1.5 crore need not pay any GST on the advance received arising from the supply of goods.

Other notable changes:

  1. The GST rate for unbranded Ayurvedic medicines has been reduced from 12% to 5%.
  2. The reduction of tax on human-made yarn from 18% to 12% is expected to bring about a change in the textile industry.
  3. The GST rate reduction on various job work items is reduced to 5% from the existing 12%.
  4. The rates for Diesel engine parts and some stationery items is now 18%. This is a reduction from the previous rate of 28%.
  5. The GST rate on food items such as khakra and other unbranded(without trademark) namkeen is now 5% from the previous 12%.
  6. The tax on zari work also has been brought down to 5% from the previous 12%.
  7. The Due Date for GSTR-6 (to be filed by an input service distributor) for the three month period of July, August, and September are now extended to 15.11.2017.
  8. E-way bill to be postponed to 1st April 2018.
  9. Jewelers need not furnish PAN number for purchases Rs.50,000. The amount requiring the KYC will be notified later.
  10. 35% abatement applicable for old leasing contract of the vehicle.

Changes in the pipeline:

  1. GST tax for AC restaurants to be reduced to 12% from the current 18%. A committee of Ministers has been formed to oversee the review of this provision, and the report is to be filed within 14 days.
  2. It is also in the pipeline to make the Composition scheme more appealing.

These are the changes brought by the Ministry and the next meeting on GST is scheduled to be held in Guwahati on the dates of 9th and 10th November.

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