The Recent Changes Made In GST Rates By Government Of India

The recent changes in GST rates

There have been specific rate changes brought forth in the latest meeting of the GST council on Oct 6 2017. The changes have been summarize as follows

Relief for small business owners:

  1. The small businesses with a turnover of 1.5 crores or less have been exempt from filing monthly GST and have to register GST return quarterly.
  2. The small business has to file the three consecutive months of July, August, and September. They will be switching over to quarterly filing only after filing these three-month.

Exemptions introduced for service providers:

  1. If the service provider has an aggregate turnover of Rs.20 lakhs or less than that except the state of Jammu &Kashmir where the turnover amount is restrict to Rs.10 lakhs, they not require to register for GST registration even if they are providers of the domestic supply of services.
  2. If the services are provide by a Goods Transport Agency(GTA) to an unregister person, it shall be exempt from GST.
  3. The small business service provider is also require to file the three-consecutive month return of July, August, and September and then switch to the process of quarterly filing.
  4. The application of TDS/TCS provisions has been a delay to 31.03.2018.

The changes effected for Exporters:

  1. The dates for refund checks have been divide into two batches:
  • Refund checks for July exports are to be refund by Oct 10 and refund checks for August exports are to reimburse by Oct 18.
  1. The Ministry is planning to introduce “E-wallet” for exporters with an estimated amount of credit preload in the wallet, and the refund amount will be deducted from the preloaded credit. It is to be introduce from April 2018.
  2. The merchant exporters are require to pay a small amount of 0.1% GST of the export goods, thereby enabling their suppliers to claim ITC.

The changes introduced in Composition scheme:

  1. The person who already eligible for the Composition scheme and are providing any free services. The fold of GST are automatically qualify for the Composition Scheme.
  2. The minimum eligibility has been raise from Rs.75 lakhs to a 1 crore.
  3. The rates of payment for traders is 1%, manufacturers 2%, and restaurants 5%.
  4. Due date of GSTR-4 of the July-September quarter has been extend till Nov 15 2017.

So the Reverse Charge Mechanism(RCM) under Section 9(4) for purchases made from the unregister dealer has been made inactive.

Section 9(3) of RCM is still in effect,So the initial expenses coming under this section are Transportation charges, Legal fees and Services received from Directors and other notified expenses.

So the suspension of Section 9(4) is active immediately from the official release of the Government Order.

The businesses having their annual turnover of less than  Rs.1.5 crore need not pay any GST on the advance received arising from the supply of goods.

Other notable changes:

  1. The GST rate for unbrand Ayurvedic medicines has been reduce from 12% to 5%.
  2. The reduction of tax on human-made yarn from 18% to 12% is expect to bring about a change in the textile industry.
  3. So the GST rate reduction on various job work items is reduce to 5% from the existing 12%.
  4. The rates for Diesel engine parts and some stationery items is now 18%, Because this is a reduction from the previous rate of 28%.
  5. The GST rate on food items such as chakra and other unbrand(without trademark) namkeen is now 5% from the previous 12%.
  6. The tax on zari work also has been brought down to 5% from the previous 12%.
  7. The Due Date for GSTR-6 (to be fill by an input service distributor) for the three months of July, August, and September now extend to 15.11.2017.
  8. E-way bill to be postpone to Apr 1 2018.
  9. Jewellers need not furnish PAN number for purchases Rs.50,000, and the amount requiring the KYC will be notified later.
  10. 35% abatement applicable for old leasing contract of the vehicle.

Changes in the pipeline:

  1. GST tax for AC restaurants to be reduce to 12% from the current 18%. So a committee of Ministers has been form to oversee the review of this provision, and the report is to be fill within 14 days.
  2. It is also in the pipeline to make the Composition scheme more appealing.

These are the changes brought by the Ministry and the next meeting on GST is schedule to be held in Guwahati on the dates of 9th and 10th November.

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