GST Council's 23rd meeting: What can be expected?
At its 23rd meeting today, the GST Council is expected to announce drastic reforms to benefit both consumers and producers. Sources say the number of items under the 28% tax slab is likely to be cut down from 222 to 52. The Council will also try to ease the compliance burden on businesses. What announcements can we expect at this meeting?
Tax rates to be cut, AC/non-AC restaurant distinction might go
There's been widespread criticism that goods had become costlier under GST. Now the Council is likely to reduce tax on shampoos, scents, chocolates, goggles, electronic goods and more from 28% to 18%. To resolve the confusion about different tax rates in AC/non-AC restaurants, such distinctions might be abolished and rates be reduced from 18% to 12%. It will also consider bringing real-estate under GST.
Relief likely for smaller firms, GSTR-3B might continue
To ease GST for business, the Council might continue the simplified GSTR-3B for a year or more instead of a few months. Small firms might be allowed to file returns quarterly, unlike large businesses which have to file monthly. The former could file GSTR-1/2/3 monthly but GSTR-3B quarterly. This'll not only reduce the compliance burden but also relax the load on the GST Network.
Three changes likely to be made to the composition scheme
Three changes are expected in the composition scheme. Firstly, a flat 2% rate might be introduced for traders (currently 1%), manufacturers (2%) and restaurants (5%). The current turnover threshold of Rs. 1cr (earlier changed from Rs. 50L to Rs. 75L and then to Rs. 1cr) could be doubled to Rs. 2cr. Firms conducting inter-state purchase/sale might finally be allowed to opt for the scheme.
A push to electronic transactions under consideration
The Council is considering pushing digital payments by offering incentives to both merchants and consumers. Eg, a merchant transacting digitally could get credit that can be adjusted against GST liabilities. Meanwhile, consumers could be offered lower taxes on electronic payments. The merchant discount rate - a charge levied on digital transactions - could also be reviewed. A panel had suggested abolishing it altogether.
The Council has introduced several measures to simplify GST
The GST Council has been constantly trying to ease the new regime. Last month, it announced several revisions in the GST structure. The composition scheme turnover threshold was increased to Rs. 1cr from Rs. 75L. All exporters will get an e-wallet from April 2018, it announced. There will be a notional amount for credit. The eventual refund will be offset from that amount.
