Sunday, Feb 25, 2018 | Last Update : 05:28 PM IST
Delay in reverse charge will boost SMEs’ businesses.
New Delhi: India Inc on Friday welcomed the outcome of the GST Council meet and said the decisions will improve compliance and provide much needed relief to the taxpayers.
CII director-general Chandrajit Banerjee said that the SME sector compliance will greatly improve as limit for composition scheme has been increased to Rs 1 crore. Now for SMEs with annual turnover of Rs 1.5 crore will be allowed to file quarterly returns, this will be a big relief to the small-scale players.
Mr Banerjee further commented that deferment of Reverse Charge Mechanism (RCM) is welcome as it encourages registered taxpayers to continue sourcing from small and unregistered taxpayers.
The decision to bring down rate for AC restaurants to 12 per cent and reduction of tax slabs for around 60 items to 5 per cent from 12 per cent will help boost household spending and further economic growth, he said.
Mr Banerjee also stated that raising of turno-ver for composition scheme from Rs 75 Lakh to Rs 1 crore and deferment of E-way bill provisions till April 2018 are indeed a big relief which will help trade and industry in getting adjusted to the GST compliances.
Regarding the e-wallet scheme for exporters and move to reimburse them within the next week, CII said this was a much needed step and would help exporters save costs of working capital.
Exporters body FIEO’s President Ganesh Kum-ar Gupta said that these initiatives will address the problem of the expo-rters particularly micro and small segments.
“The refund of GST for the month of July by 10th October and August by 18th October will add-ress the liquidity concerns of the exporters,” he said.
He also welcomed the decision to introduce e-wallet, mooted by FIEO, at the introduction of the GST which will provide a permanent solution to the liquidity problem of the export sector. These are very pragmatic decisions which show the flexible approach of the government which will ameliorate the problem of export sector and will impart much needed competitiveness to exports, Mr Gupta said.
The GST Council made sweeping changes to give relief to small and medium businesses on filing and payment of taxes, eased rules for exporters and cut tax rates on more than two dozen items. Businesses with annual turnover of up to Rs 1.5 crore, which constitute 90 per cent of the taxpayer base but pay only 5-6 per cent of total tax, have been allowed to file quarterly income returns and pay tax instead of the current provision of monthly filings.
Also, the turnover threshold for businesses to avail of the composition scheme that allows them to pay 1-5 per cent tax without going thro-ugh tedious formalities, was raised to Rs 1 crore from current Rs 75 lakh. SMEs had complained of tedious compliance burden under the GST that was supposed to be a simple ind-irect tax regime which replaced over a dozen Central and state taxes.