Finance Minister Arun Jaitley on Friday said that rules for small businesses and exporters would be eased under the Goods and Services Tax (GST), a move that could provide relief to thousands of small firms. Small businesses would be allowed to file tax returns once a quarter instead of monthly returns, Jaitley said following the 22nd GST Council meeting in New Delhi. GST, which was launched in July, is a landmark reform which turned India’s 29 states into a single market for the first time.
Here are updates from the 22nd GST Council meeting, underway at Vigyan Bhawan in New Delhi:
9:25 PM: Reduction in GST cost compliance for small/medium biz will now increase tax-payers base, says Mukesh Bhutani as reported by CNN News 18
— ET NOW (@ETNOWlive) October 6, 2017
9:10 PM: GST on Diesel engine parts, pumps has been reduced from 28 percent to 18 pct
9:05 PM: GST on stationary items has been slashed from 28% to 18%
8:54 PM: GST rates in future will be cut keeping revenue neutrality in mind; quarterly GST returns may be set from Oct-Dec period
— News18 (@CNNnews18) October 6, 2017
8:43 PM: Finance Minister Arun Jaitley says GST rate on many job work items reduced from 12% to 5%
8:30PM: GST rate on unbranded ayurvedic medicines to 5% from 12%, says FM
8:28PM: GST rate on man-made yarn reduced to 12% from 18%, says FM
8:26PM: Businesses with turnover above Rs 1.5 cr to continue filing monthly returns, says FM
8:24PM: Non-composition scheme taxpayers with turnover upto Rs 1.5 cr to file quarterly returns, says FM
8:22PM: Discussed whether inter-state sales will be allowed for assessees under composition scheme, says FM
8:20PM: 1% tax applicable on traders under composition scheme, says FM
8:18PM: Studied representations that compliance burden on small taxpayers was heavy, says FM
8:16PM: The limit for turnover in compensation scheme raised from Rs 75 lakh to Rs 1 crore, says FM
8:14PM: Not possible to comment on pattern of GST collection as it’s a transition phase, says FM
8:12PM: There were representations on issues related to MSMEs and exporters with respect to GST, says FM
8:10PM: For future, every exporter to get an e-wallet for refunds, says FM
8:08PM: Electronic refund mechanism for exporters will take some time, says FM
8:06PM: There has been blockage in credit of exporters which affects their cash liquidity, says FM
8:04PM: E-wallet for each exporter to be made and notional amount as advance refund will be given; will be initiated on 1 April 2018, says FM Jaitley
8:03PM: Pattern of collection of GST is not clear after two months because it was a period of transition, says FM
8:02PM: Discussed isses faced by SMEs and exporters, says FM
8:01PM: Reviewed impact of GST in various sectors in last 2 months, says FM
8:00PM: Finance Minster Arun Jaitley addresses media after GST Council Meet
7:55PM: Focus was on small traders & exporters & on reducing compliance distress, says Haseeb Drabu to CNBC TV18
7:54PM: Direct subsidies for exporters is one option on the table instead of e-wallet, says Haseeb Drabu to CNBC TV18
7:53PM: GST on works contracts for government reduced to 5% from 12%, says Haseeb Drabu to CNBC TV18
7:52PM: Not a lot of big-ticket rate revisions at this GST Council meeting, says Haseeb Drabu to CNBC TV18
7:51PM: There’s a possibility that GST Council may look at other modalities instead of e-wallet, says Haseeb Drabu to CNBC TV18
7:50PM: GST council favours starting e-way mechanism by January 2018, says Haseeb Drabu, J&K FM
7:45PM: Government taking suggestions from industry and tweaking GST is positive for industry, says Gitanjali Exports to BTVI
7:40PM: Would need to revisit exports target; will continue to calibrate foreign trade policy, says Commerce Secretary
7:35PM: Review of foreign trade policy not being delayed due to GST, says Commerce Secretary
7:30PM: BJP government wants to work in favour of traders and consumers, says UP FM to BTVI
7:25PM: Household items have seen a rate cut, says Mauvin Godinho
7:18PM: Council increases composition threshold to Rs 1 crore from Rs 75 lakh, says Sushil Modi to BTVI
7:16PM: Businesses with turnover of less than Rs 1.5 crore allowed to file quarterly GST returns, says Sushil Modi to BTVI
7:14PM: GST Council decides to bring down rate for AC restaurants to 12 percent; GoM to decide mechanism, says Kerala FM to News 18
7:13PM: Rate reduction has taken place in many commodities, says Kerala FM to News 18
7:12PM: GST rate on a few items from the 28% bracket has been reduced, says Kerala FM to News 18
7:11PM: GST rate of gas stove & consumer articles cut from the current 28%, says Kerala FM to News 18
7:10PM: Panel to consider rationalising GST rate for restaurants, says Kerala FM
7:05PM: IGST exemption for exporters for 6 months, says Kerala FM
7:00PM: Have decided to bring in e-wallet facility to exporters after 6 months, says Kerala FM
6:55PM: GST has affected exporters sharply, says Kerala FM
Watch what Kerala FM has to say
— ET NOW (@ETNOWlive) October 6, 2017
6:50PM: Composition scheme likely to get ITC & inter-state benefits, say CNBC TV18 sources
6:45PM: GST Council to examine making Composition Scheme more attractive, say CNBC TV18 sources
6:40PM: Group of ministers setup to examine key rate cut issues in restaurants, say CNBC TV18 sources
6:30PM: Government revokes GST notification on gems and jewelry, separate notification to be issued separately after due consideration.
6:10PM: Threshold for composition scheme in GST hiked from Rs 75 lakh to Rs 1 crore, PTI sources
6:05PM: India Ratings and Research believes that the four-rate tax slabs of 5%, 12%, 18% and 28% in GST would have a bearing on the profitability of most industries. Further, additional cess on some of the products, if absorbed by the respective businesses, would impact their margins.
6:00PM: GST Council decides to roll out the e-way bill from April, say CNBC TV18 sources
5:55PM: GST is good, but 28 per cent is very high, says Craig Smith, President and MD, Asia Pacific, Marriot International. Under the GST regime, hotels with room rent exceeding Rs 7,500 attract tax rate of 28 per cent, while accommodation in any hotel, including 5-star hotels, with tariff of less than Rs 7,500 per day is to be taxed at 18 per cent.
5:50PM: Initial hiccups pertinent to GST are expected to be resolved soon, facilitating growth in the second half. On the broader horizon, structural reforms introduced by the government and ongoing formalization will boost economic growth, says Hitesh Jain, IIFL Wealth Management
5:45PM: Members of the Tamil Nadu film fraternity, who went on an indefinite strike in July against GST, want the 10 per cent local body tax to be scrapped as they feel it would lead to huge losses for the producers.
5:40PM: Vice President M Venkaiah Naidu says discussions on the economy and GST should carry on, stressing that such debates are always good for democracy.
5:35PM: The construction, consumer durables and metal industries across corporates are facing higher challenges than others during the transition due to the nature of their business and their respective margins and credit profiles, says Ind-Ra
5:30PM: Ind-Ra expects the transition to the GST regime to affect the micro, small and medium enterprise (MSME) space more than other industries, as industry participants lack compliance infrastructure to map the entire outstanding inventory with tax invoices. Furthermore, the weak credit profile of the MSME sector and risk weights attached to the loans extended to this sector in banks’ books could force the sector to resort to borrowings from non-bank finance companies. This is more costly than borrowing from banks and could aggravate the credit impact of the GST transition on the MSME space.
5:25PM: India Ratings and Research (Ind-Ra) believes that the transition to the goods and services tax (GST) regime would significantly affect companies with weak credit profiles because of a short-term liquidity mismatch due to delays in the availability of input tax credit (ITC). This is due to the difficulties in mapping the inventory held on the transition date with respective invoices, various GST network (GSTNIT back bone of GST)-related technical issues and admissibility of these ITC claims. The admissibility could depend on companies’ ability to match corresponding tax invoices with vendors’ filings.
5:20PM: Analysts expect the GST council to make adjustments to the tax structure for certain payers
5:15PM: The positive steps taken by the Indian government like the implementation of the Goods and Services Tax and the ease of doing business are heartening, says Sunil Peter, chief executive officer of the Singapore Indian Chambers of Commerce and Industry (SICCI). Read More
5:10PM: SpiceJet CMD Ajay Singh made a pitch for a cut in state taxes on ATF and bringing it within GST to make the Indian aviation sector the fastest growing in the world. Speaking at the India Economic Summit of the WEF, he said the sector if given benefits in terms of taxation and cost, there is no reason why India will not emerge as the fastest growing aviation market in the world in the next decade. Read More
5:05PM: When you introduce radical changes like this (demonetisation and GST), you have to expect unintended consequences. So, it was a huge political step to step into the water and then learn to swim, says Finance Ministry’s principal economic advisor Sanjeev Sanyal
5:00PM: Vice President Naidu: World Bank and big multinational companies have endorsed GST and that future generations of Indians will be happy with this tax reform.
4:55PM: Informal sources of working capital (for smaller firms) has dried up, it would be another year before GST began to have a positive impact on smaller companies, says Anil Bhardwaj at the Federation of Indian Micro and Small and Medium Enterprises.
4:50PM: Expect the government to allow 25,000 small and medium-sized members to file tax returns quarterly. The drill to file returns every month is exhausting, says Ajay Sahai, head of the Federation of Indian Export Organisation
4:45PM: The government has already allowed exporters to furnish Letter of Undertaking (LUT) instead of bonds at the time of exports, which will ease the compliance burden and stop locking up of capital.
4:42PM: The last date for filing of final sales returns for July in GSTR-1 form is October 10, while the date for uploading of purchase returns in GSTR-2 is October 31. The final GSTR-3, matching GSTR-1 and 2, is to be filed by November 10.
4:40PM: With over 33 lakh businesses filing the final GSTR-1 return, the GoM has tasked GSTN to send reminder text messages to the remaining 20 lakh businesses which are yet to submit the tax forms.
4:35PM: Yesterday, West Bengal Chief Minister Mamata Banerjee described demonetisation as the “biggest disaster” and the Goods and Services Tax as a “great stunt”.
4:30PM: In a meeting with the revenue Secretary last month, exporters had said that an estimated Rs 65,000 crore is locked up in GST refunds
4:25PM: NSE index rose nearly 1 percent, its biggest daily gain in over seven weeks, with Tata Steel climbing on strong quarterly production numbers, as investors awaited the outcome of GST Council meeting.
4:20PM: Nomura research note: In our baseline, we expect some of the growth drag caused by demonetisation and GST to reverse and growth to recover from July-September quarter of 2017.
4:15PM: Describing note ban and the implementation of GST as structural changes in the economy, Hero Enterprises Chairman Sunil Kant Munjal said though there may be short time hiccups, such steps would yield results in the long run. He said, “Structural changes will take six months to two years time to show results. There may be some short term (hiccups). As I said, next year, if the government continues with the pace of forward looking reforms and does electioneering campaign for polls in balance, then I don’t see any risk to our potential for growth.”
4:10PM: Expect positive decision on quarterly filing for businesses under Rs 1.5 crore turnover, says Telangana Finance Minister
4:05PM: Full consensus likely on hiking composition scheme threshold, says Telangana Finance Minister
4:00PM: Yet to take a decision on reducing VAT on petrol & diesel, says Telangana Finance Minister
3:55PM: Need to continue with e-way bills, says Telangana Finance Minister
3:50PM: Telangana FM: Discussed filing of quarterly returns with annual turnover of Rs 1.5 cr
Watch what Telangana FM has to say
— ET NOW (@ETNOWlive) October 6, 2017
3:45PM: Andhra Pradesh FM: Requested quarterly filing of returns for small taxpayers; also discussed issues faced by small taxpayers
3:40PM: ET Now Sources: GST Council discussed issues faced by small traders
3:35PM: GST composition turnover limit currently at Rs 75 lakh
3:30PM: Andhra Pradesh FM: Consensus on increasing composition threshold on turnover of Rs 1 crore. Read more
3.10 pm: GST Council may approve suspension of reverse charge till March 31, CNBC TV18 reported citing sources. Reverse charge mechanism shifts the liability to pay the tax on the buyer rather than the seller. Under this mechanism, large companies are required to deduct taxes while sourcing goods from MSMEs to pay to government. But MSMEs tend to lose out on business since the large companies do not want to buy from them to avoid additional compliance burden.
2.50 pm: Weak demand post GST rollout to hit retail sales growth, says IIFL: The brokerage and research firm says it expects sales growth to moderate in Aug-Sep (Q2FY18) across retail companies, given weak demand post GST implementation. Healthy growth in September makes players optimistic on Q3 performance, it says.
2.45 pm: The GST returns filing deadline has already been extended twice earlier, from the September 5 deadline originally put in place. The government has asked the GST Network (GSTN) IT backbone provider to send reminders to over 20 lakh businesses that have yet not filed their GSTR-1 forms, as the revised October 10 deadline nears. The government has already said it will not extend the deadline further for filing the final tax returns.
2.35 pm: The October 10 deadline for filing final tax returns under GST for the first month — July — is nearing. Businesses with turnover of less than Rs 100 crore are required to file their GSTR-1 for July sales by October 10; GSTR-2 for July purchases by October 31; and GSTR-3 for matching both by November 10.
2.25 pm: Double taxation happening under GST, says ICAI: The Institute of Chartered Accountants of India (ICAI) has submitted suggestions to remove the instances of double taxation under goods and services tax (GST). It claimed that provisions of reverse charge mechanism (RCM) and composition scheme are leading to cascading of taxes.
2.15 pm: India’s GST rollout a positive step, Singapore Indian Chambers of Commerce and Industry head says: The positive steps taken by the Indian government like the implementation of the Goods and Services Tax and the ease of doing business are heartening, Sunil Peter said.
2.05 pm: The GST Council may consider reducing the tax slab to 5% from the existing 12% on labour component in government project works. The step will ostensibly be taken in order to correct an anomaly in the form of higher tax rates on inputs for goods or services which have lower tax rates. This situation has resulted in very high input tax credit claims in the months following the implementation of GST.
1.45 pm: The items that may see a tax rate cut today include: dining in AC restaurants, which may be brought under 12% tax slab from 18%; and unbranded cereals, handicraft items, artificial jewellery, which may now move to 5% tax bracket from 12%, a MoneyControl.com report said. In addition, some luxury goods in the 28% tax bracket may also see a tax cut.
1.10 pm: The registration for the composition scheme may be opened yet again — for the third time now — with a fresh deadline of March 31.
12.25 pm: Composition scheme threshold may be raised to Rs 1 crore or Rs 1.5 crore, several media reports have said. This will bring big relief to many more small businesses, who will have the convenience of paying a flat rate of 1%, 2% or 5%, and avoid a lot of paperwork.
12.05 pm: Major relief steps for exporters are on cards. First up, the government may speed up the refund of tax credit claims aggregating to Rs 65,000 crore, which includes thousands of crores of rupees from exporters. Next, it may also relax working capital requirement for exporters, some unconfirmed news reports have said.
11.30 am: GST Council may cut tax rates on as many as 60 goods and services today. While several items of frequent consumption may be brought down to 5% tax slab from 12% at present, the tax rate on some other items in the highest tax bracket of 28% too might be reduced.
11.15 am: Tax cut on 60 items on anvil; relief for exporters, SMEs on cards: The GST Council may take immediate steps for a host of relief to exporters, SMEs and consumers when it meets today for the third time since the implementation of the Goods and Services Tax.
11.00 am: 22nd GST Council meeting underway at Vigyan Bhawan in New Delhi. Press briefing likely after 4.00 pm today.