Massive bonanza has come from the 23rd GST Council meeting for both common man and small businesses. The GST Council today took pathbreaking decisions of dining out along with 177 items cheaper by slashing tax rates on them. For businesses, the council first, raise the threshold for the Composition Scheme to Rs 1.5 crore; and second, eased the compliance burden for bigger businesses. The GST Council meeting was held on Thursday and Friday in Assam’s capital Guwahati.
Here’s all you need to know about the lower taxes, composition rebate and easier rules:
1. The GST Council has slashed tax rate on all restaurants to 5% without input tax credit. Only the restaurants with rooms above Rs 7,500 will be taxed at 18% with ITC. The GST was earlier levied at 12% on non-AC restaurants while it is 18% for air-conditioned ones.
2. A massive GST rejig was done, in which 177 items under the highest tax slab of 28% were brought down to the 18% or lower tax brackets. The GST Council has decided to keep only 50 items, mostly demerit, sin and luxury goods in the 28% bracket. These items include chocolates, chewing gum, shaving cream, aftershave kits, beauty products, granite and marble.
3. According to Finance Minister and GST Council chairman Arun Jaitley, the new tax rates on all 177 items will be applicable from November 15. There were two items — wet grinders and armoured fighter vehicles — on which the tax rates were brought down from the 28% to 12%. There were 13 items on which tax rates were brought down from 18% to 12%, 6 items from 18% to 5%, 8 items from 12% to 5% and 6 from 5% to nil.
4. The council has also raised the threshold for the Composition Scheme to Rs 1.5 crore. The Composition Scheme was earlier one crore. Under the GST regime, start-ups and small businesses are given the choice to opt for the Composition Scheme, in which taxpayers are required to file summarised returns on a quarterly basis, instead of three returns every month. Composition scheme is open for manufacturers, restaurants and traders.
5. The GST Council also said that measures were taken to reduce the tax compliance burden of the tax-payers. Now, only GSTR-1 and GSTR-3B need to be filed. Filling for GSTR-3B will be continued until March 2018 and GSTR-1 can be filed without waiting for GSTR-2 and GSTR-3. The council has also cut down late filing for nil returns to Rs 20 per day and for other returns cut to Rs 50 per day.