GST in India: In a good news for traders and people, small businesses under the Goods and Services Tax (GST) are likely to get a rate cut of 1 per cent.
GST in India: In a good news for traders and people, small businesses under the Goods and Services Tax (GST) are likely to get a rate cut of 1 per cent. This is for all three categories of composition dealers — traders, manufacturers and restaurants. Currently, the existing rates for these categories are 1, 2 and 5 per cent respectively. The Group of Ministers (GoM) headed by Assam Finance Minister Himanta Biswa Sarma has also suggested doing away with the tax rate distinction between AC and non-AC restaurants, those which are not covered under composition scheme, and tax them at 12 per cent. The decisions were taken during a meeting held on Sunday.
The GoM has also proposed a rebate for traders and manufacturers who differentiate between exempted and non-exempted supplies under the composition scheme. Typically meant for small kirana stores, the distinction between exempted and non-exempted supplies would imply a lower tax rate of 0.5 per cent on the total turnover under the composition scheme; otherwise, it would be 1 per cent, the ministers said, according to reports.
GST Council will have to approve these. If approved, this will be the second round of relief measures for small and medium businesses within a month. Earlier, the GST Council had approved a first round of relief measures in its October 6 meeting. The next GST Council meeting is scheduled in Guwahati on November 10, where a final call will be taken on the GoM’s recommendations.
The GoM has also proposed the inclusion of inter-state sales for traders and manufacturers in the composition scheme, the second state finance minister said. The decision on whether to allow input tax credit for the same is yet to be finalised, the minister added.