Thursday, Jul 19, 2018 | Last Update : 10:44 PM IST
The e-wallets will provide exporters the funds to pay the tax without choking liquidity.
New Delhi: In a relief to exporters, Union Finance Minister Arun Jaitley at the 22nd meeting of the GST Council on Friday declared that each exporter will get an e-wallet, where a notional amount will be paid to him/her as an advance credit through which they can pay their taxes.
Taking into account the fact that exporters’ credit was facing blockage that affected their liquidity, the Goods and Services Tax (GST) Council declared the roll out of these e-wallets by April 2018.
Jaitley also said that exporters will be refunded for the month of July and August from October 10 and from October 18, respectively, by way of cheque.
The e-wallets will provide exporters the funds to pay the tax without choking liquidity and actual refunds will be offset against advance refund in e-wallet.
It should be noted that prior to GST, exporters did not incur taxes for import of inputs for export purposes. However, after GST, IGST blocked their working capital.
The Council also reduced the tax compliance on small and medium businesses in two ways.
Firstly, the Council raised the threshold for availing the composition scheme from companies with turnover of Rs 75 lakh to those with turnover of up to Rs 1 crore.
Secondly, those having turnover of up to Rs 1.5 crore and constitute 90 per cent of the assesses outside of composition scheme, will be filing quarterly returns instead of monthly returns.
The tax rates under composition scheme is 1 per cent for traders, 2 per cent for manufacturers and 5 per cent for restaurants. In the service sector, composition scheme is available only for restaurants.
On the much awaited roll out of the e-way bill, Jaitley said that it will be implemented by April 1, 2018.
Reverse charge mechanism for transactions between registered and unregistered businesses has been deferred till Mar 31, 2018. Reverse charge means the liability to pay tax is on the recipient of supply of goods or services instead of the supplier of such goods or services in respect of notified categories of supply.
The GST Council also made some major changes as far as rates are concerned. "Rates have been tweaked on 27 items," said Jaitley.
Following are the changes that have been made:
Jaitley also said there was an impression among members of the GST Council that restaurants were not passing on the benefit of input tax credit to consumers. In this regard, a committee of finance ministers will revisit the taxation system for restaurants.