Most changes to the goods and services tax (GST) regime suggested by a panel of state finance ministers to help small businesses and traders could be endorsed by the GST Council at its next meeting on November 9 and 10, Prime Minister Narendra Modi hinted on Saturday.
Most changes to the goods and services tax (GST) regime suggested by a panel of state finance ministers to help small businesses and traders could be endorsed by the GST Council at its next meeting on November 9 and 10, Prime Minister Narendra Modi hinted on Saturday. He also expressed confidence that India’s rank in the World Bank’s ease of doing business ranking will improve even further once the GST is taken into account from next year.
“I am happy to say that the ministers’ committee, set up by the GST Council, is addressing all the issues raised by small traders and almost all the suggestions made by the small businesses are being accepted positively. If no state raises objections in the GST Council meeting on November 9 and 10, I am confident whatever changes are required to strengthen the businesses and the broader economy will be done,” Modi said, addressing the gathering at an event at the Pravasi Bhartiya Kendra in the capital. While a reduction in tax rates for several items under the highest 28% slab is expected, the group of state finance ministers has recommended that all taxpayers be allowed to file detailed returns on a quarterly — instead of monthly — basis while they continue to make the tax payments every month.
Also, all restaurants should pay a 12% tax instead of having to follow two sets of rates (currently, air-conditioned restaurants pay GST at 18%, while the levy is 12% for non-air-conditioned ones). However, the uniform 12% rate will come with the removal of the input tax credit facility. Also, the benign composition scheme that allows the businesses to pay tax as small percentage of turnover instead of the item-wise GST rates may be made available to units with turnover of up to Rs 1.5 crore as against Rs 1 crore now. The composition scheme may be made accessible to units with intra-state sales as well.
Modi said the country’s rank in ease of doing business has climbed 42 places in the last three years, including the unprecedented 30-notch jump in the latest ranking to 100th of 190 nations. He said the GST not just integrated the nation of 1.2 billion into one market with one tax rate, but also offered a stable and transparent tax regime. The Prime Minister said while the jump is impressive, he does not want to sleep over it with contentment, but intends to push everyone concerned to achieve even greater heights. “There are many other reforms that have already happened, but need gestation and stabilisation time before they are taken into account by the World Bank. There are a few other reforms where our team and the World Bank team need to find common ground,” Modi said.