Tuesday, July 17, 2018


Traders with annual turnover of Rs 1.5 crore can file GST once a quarter
Monday, 09 October, 2017, 08 : 00 AM [IST]
Ashwani Maindola, New Delhi
The Goods and Services Tax (GST) Council, at its 22nd meeting in New Delhi, decided to relax the norms for filing the taxes under the new tax regime. Now, traders earning an annual turnover of Rs 1.5 crore will be filing the tax once a quarter.

The Council stated that it recommended the changes to give some relief to the small- and medium-sized traders, businesses and enterprises, thus easing the burden of compliance on them.

Arun Jaitley, finance minister, said that to facilitate the ease of payment and return filing for small and medium businesses with annual aggregate turnover up to Rs 1.5 crore, the GST Council has decided that such taxpayers shall be required to file quarterly returns in FORM GSTR-1,2 and 3 and pay taxes only on a quarterly basis, starting from the third quarter of this financial year (i e from October to December 2017).

Further, to reduce the compliance costs, the GST Council has decided to suspend the reverse charge mechanism under Sub-section (4) of Section 9 of the Central Goods and Services Tax (CGST) Act, 2017, and under Sub-section (4) of Section 5 of the Integrated Goods and Services Tax (IGST) Act, 2017 till March 31, 2018. The same will be reviewed by a committee of experts.

It has also decided that taxpayers having annual aggregate turnover up to Rs 1.5 crore shall not be required to pay GST at the time of the receipt of advances on account of the supply of goods. The GST on such supplies shall be payable only when the goods are supplied.

In addition, the services provided by goods transport agencies (GTAs) to unregistered persons are also exempted from GST.

The Council also decided to exempt those service providers whose annual aggregate turnover is less than Rs 20 lakh [Rs 10 lakh in special category states except Jammu and Kashmir (J&K)] from obtaining registration, even if they are making inter-state taxable supplies of services.

Also under the composition scheme, it has been decided that taxpayers having an annual aggregate turnover of upto Rs 1 crore as compared to the current turnover threshold of Rs 75 lakh will be eligible. This threshold of turnover for special category states, except J&K and Uttarakhand, shall be increased to Rs 75 lakh from Rs 50 lakh.

“This decision has come as a positive development for the small businesses and exporters. The small businesses were finding it difficult to submit the tax every month,” said Sagar Kurade, managing director, Suman Projects Consultants, and immediate past president, All India Food Processors’ Association (AIFPA).

“It has proved as an additional cost burden. Now relaxing the filing of taxes once in a quarter is a big relief for the micro-, small and medium enterprises (MSME) sector,” he added.

“It would ease compliance and processing. However, on the part of the rates, there continue to be unresolved contentions like branded and unbranded products, amongst others. Overall it was a positive decision taken by the GST Council,” Kurade said.

The GST Council has also revised rates to five per cent, from 12 per cent and 18 per cent, of certain products, which include sliced and dried mangoes, khakra, plain chapati or roti, food preparations put in unit containers and intended for free distribution to the economically-weaker sections of the society and namkeens other than those put in unit containers and (a) bearing a registered brand name or (b) bearing a brand name on which an actionable claim or enforceable right in a court of law is available.

For exporters, it has been decided that. by October 10, 2017, the held-up refund of IGST paid on goods exported outside India in July would begin to be paid. The August backlog would get cleared from October 18, 2017, and the refunds for the subsequent months would be handled expeditiously.

Other refunds of IGST paid on supplies to special economic zones (SEZs) and of inputs taxes on exports under a bond/letter of undertaking (LUT) shall be processed from October 18, 2017 onwards.

For this, the Council agreed to suitably empower Central and state GST officers, so that exporters get refunds from one authority only. Related matters of settlement of funds are being resolved.  

Merchant exporters will now have to pay a nominal GST of 0.1 per cent to procure goods from domestic suppliers for export. The details would be released soon. 

Also focusing on the permanent solution to cash blockage, the Council suggested e-wallets, which would be credited with a notional amount as they were advanced refunds.

“This credit would be used to pay IGST, CGST, etc. The details of this facility would be worked out soon. The Council desired that the e-wallet solution should be made operational with effect from April 1, 2018,” it added.

The Confederation of All Indian Traders (CAIT) termed it a major breakthrough in simplifying GST and encouraging the fast adoption and access of GST among the trading community of the country, adding that it would clear the air of uncertainty and chaos.

“Enabling composition dealers to make inter-state sales is a bold decision and will enable small traders to remain competitive. An increase in the composition scheme upto Rs 1 crore, the deferment of the e way bill and the reverse charge mechanism will boost business sentiments in the country,” it added.

“The quarterly return for persons having an annual turnover of upto Rs 1.5 crore will give much relief to small traders in the country and offload from monthly tax compliance,” CAIT said.

“The waiver of IGST to exporters will certainly boost the country’s exports. Reduction of tax rates on 27 items will lower the cost of such goods,” it added.
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