GST review: What to expect at tomorrow's Council meet
The GST Council is expected to announce a slew of reforms at its 23rd meeting on November 9-10 in Guwahati. For one, tax rates of many items under the highest slab of 28% are expected to undergo a cut. The Council is also expected to push for digital transactions with rewards for both merchants and customers. Find all details here.
Proposal to cut tax rates, especially on goods under 28%
Since sometime, officials have been reviewing items under the 28% slab. According to sources, "The idea is to limit the 28% levy to sin/luxury goods." Now Bihar Dy CM Sushil Modi has said taxes on 80% of 227 items (under 28%) will be slashed to 18%, especially on daily-use goods. There's also a proposal to cut taxes on some goods from 18% to 12%.
Govt tries to dispel rumors about increased tax burden
The review comes amid criticism that taxes on items had increased under GST. According to officials, the perception of higher taxes is also due to detailed tax break-up in bills. Officials are discussing returning to 'all-inclusive price' bills.
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.
Returns filing might be made easier for firms
Another proposal being considered is letting larger firms with annual turnovers of up to Rs. 1.5cr under the composition scheme and a flat 1% tax for all. Last month, the GST Council allowed those with annual turnovers of up to Rs. 1cr to file returns quarterly. There's also a suggestion to cut down late returns filing fee from Rs. 200 to Rs. 50.
The latest directives of the GST Council
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.
