Apart from significant cuts in taxes of various commodities, Finance Minister Arun Jaitley announced a slew of measures to reduce the burden and stress the GST implementation has brought to exporters and small businesses. The threshold for composition scheme in GST has been hiked from Rs 75 lakh to Rs 1 crore for businesses to avail of the composition scheme.
GST council had allowed SMEs with annual turnover of up to Rs 1.50 crore to file for quarterly returns.
FM Arun Jaitley said there is an impression that large restaurants with 18% tax have not reduced the prices despite the benefit of input tax credit being available. By next April, the government will kick start a new digital e-wallet system for every exporter.
The major difficulties that the export sector was facing, as identified by the Council, are on account of delays in refunds of Integrated Goods and Services Tax (IGST) and input taxes on exports and working capital blockage as exporters have to upfront pay GST on inputs and capital goods for export production or for procuring goods for export.
The breather has come at a time when exporters were faced with a 20% decline in the order-booking position from October and Christmas and New Year exports were affected.
Retail traders have welcomed the relief measures granted by the GST Council but demanded setting up of joint committees of government officials and trade bodies at the central, state and district levels in order to address issues and for effectively implement the GST regime.
He said since it was such a vast tax reform, the government should be given a minimum of a year for a ideal implementation, which would lead to a win-win situation for all stakeholders. Under the Composition Scheme, traders have to pay a fixed tax rate between 1-5 per cent.
GST rate on unbranded medicines have also been reduced to 12 percent to 5 percent. Increasing minimum tax-slab from 5 to 10 percent may look little harsh, but will provide practically much more relief by withdrawal of higher slabs at 12 and 18 percent. "Today, GST Council discussed all these issues at length when other states too raised these issues including work contracts", Rajender said.
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The GST Council has also constituted a panel to consider rationalising GST rate for restaurants, he added. "We are glad that the Centre has now taken decision which can be considered good for the people".
A thin, crisp cracker made with wheat flour, salt and oil, Khakhra is a popular staple in Gujarati and Rajasthani cuisine.
Last Saturday, RSS chief Mohan Bhagwat had asked the government to not allow informal sectors such as small and medium enterprises, self-employing cottage industries, and agriculture to suffer.
Companies with a turnover of up to ₹1.5 crore a year can also file returns and pay taxes once a quarter.
Some stationery items, diesel engine parts.
Food packets given to school kids under ICDS will attract 5 per cent tax instead of 12 per cent.
Food items like sliced dry mangoes, khakra and chapatti.