GST Rates & Rationalization
- The list of 28% GST rated goods is recommended to be pruned substantially, from 224 tariff headings to only 50 tariff headings.
- Further, the Council has recommended changes in GST rates on a number of goods, so as to rationalise the rate structure with a view to minimising classification disputes.
- The Council has also recommended issuance of certain clarifications to address the grievance of trade on issues relating to GST rates and taxability of certain goods and services.
- On the services side also, the Council recommended changes in GST rates to provide relief to aviation & handicraft sectors and restaurants.
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- Uniform rate of tax @ 1% under composition scheme for manufacturers and traders (for traders, turnover will be counted only for the supply of taxable goods). No change in rates for composition scheme for restaurants under composition scheme (presently at taxes at 5%)
- Supply of services by Composition taxpayer upto Rs 5 lakh per annum will be allowed by exempting the same.
- Annual turnover eligibility for composition scheme will be increased to Rs 2 crore from the present limit of Rupees 1 crore under the law. Thereafter, eligibility for composition will be increased to Rs. 1.5 Crore per annum.
- Necessary amendments to the CGST Act and SGST Acts will be carried out in due course.
Changes in GST rates of Restaurant Services:
- Stand-alone Restaurants (irrespective of AC or not) – 5% (without ITC).
- Restaurant in hotel premises depending upon room tariff. Tariff less than Rs.7500 per unit per day tax rate shall be 5% without ITC & for the tariff above Rs.7500 per unit per day tax rate shall be 18% with ITC.
- Outdoor Catering remains taxable at 18% with ITC.
- The above changes are proposed to be implemented from 15th November 2017 subject to notification in Official Gazette.
- Return filing process is to be simplified in the following manner:
- All taxpayers are proposed to file GSTR-3B along with payment of tax by 20th of the succeeding month till March, 2018
- With regards to GSTR-1, taxpayers are proposed to be divided into two categories, which are mentioned below:
- Taxpayers with annual aggregate turnover upto Rs.1.5 crore need to file GSTR-1 on a quarterly basis as per following frequency :
- Taxpayers with annual aggregate turnover more than Rs. 1.5 crore need to file GSTR-1 on monthly basis, as mentioned below:
- GSTR-2 and GSTR-3 are on hold for the month of Jul 2017 to Mar 2018. A committee of officers will recommend the due dates.
- Late fee for a taxpayer whose tax liability is ‘NIL’ (from October 2017 onwards) will be Rs. 20/- per day (Rs. 10/- per day each under CGST & SGST Acts) instead of Rs. 200/- per day (Rs. 100/- per day each under CGST & SGST Acts).
- A blanket waiver of the late fees was granted in all cases where FORM GSTR-3B was not filed within due date for the months of July, August and September 2017. Late fee already paid if any will be credited to the Electronic Cash Ledger under “Tax” head to enable tax payers to use for the discharge of their future tax liabilities. Software changes are to be made to this effect.
Benefits for service providers
- Exports of services to Nepal and Bhutan have already been exempted from GST. It has now been decided that such exporters will also be eligible for claiming Input Tax Credit in respect of goods or services used for effecting such exempt supply of services to Nepal and Bhutan.
- It was decided to exempt those service providers whose annual aggregate turnover is less than Rs. 20 lakhs (Rs. 10 lakhs in special category states except for J & K) from obtaining registration even:
- If they are making inter-State taxable supplies of services
- If they are having an e-commerce platform turnover from obtaining compulsory registration provided their aggregate turnover does not exceed Rs.20 lacs p.a
As a result, all service providers, whether supplying intra-State, inter-State or through e-Commerce operator, will be exempt from obtaining GST registration, provided their aggregate turnover does not exceed Rs. 20 lakhs p.a (Rs. 10 lakhs p.a in special category States except for J & K).
Extension of dates
- Due to the late availability or unavailability of some forms on the GSTN portal, it has been decided that the due dates for furnishing the following forms shall be extended as under:
- Revised due dates for subsequent tax periods will be announced in due course.