The Goods and Services Tax Council took a slew of decisions during its 23rd meeting in Guwahati on Friday to benefit consumers and businesses alike.
While consumers will stand to benefit from a number of rate cuts, including the tax on restaurants, businesses stand to benefit from a significant easing of compliance norms to do with filing returns.
Up to November 15, when the decisions take effect, the GST system requires businesses to submit at least three forms to file their returns.
The GSTR-1 dealt with the invoice-wise details of supply, GSTR-2 dealt with the receipts of goods, and GSTR-3 was an overall summary derived from the two previous forms.
Now, the GST Council has decided that, in order to ease the compliance burden on businesses, companies would be allowed to only file the GSTR-1 form, up to March 31, 2018.
The Council has set up a committee to look into how to make the GSTR-2 form easier, following which it will be brought back into the system.
The Council also decided to extend the usage of the summary GSTR-3B form, meant to make life easier for those unfamiliar with the filing process, till March 31 from the earlier December 31 deadline.
Companies with a turnover of up to र1.5 crore a year will now be able to file their GSTR-1 forms for each month in a quarterly manner.
Companies earning र1.5 crore or more a year can file their July to October forms by December 31.
Not only did the latest Council meeting ease the deadlines, but it also slashed the penalties for filing late.
For companies with nil tax liability for a particular month, the penalty for delays has been cut to र20 per day from र200 per day. All other companies will have to file a penalty of र50 per day, down from र200 per day.
The GST Council - the apex body for decision making headed by finance minister Arun Jaitley - also decided to impose a uniform GST rate of 5 percent across all categories of standalone restaurants - air-conditioned and non-air-conditioned - but withdraw the benefits of input tax credit (ITC) from such businesses.
Restaurants in starred hotels and outdoor catering services will attract a GST of 18 percent along with ITC benefits.Composition Scheme
- The annual turnover threshold on the composition scheme will be raised from Rs 1 crore to Rs 1.5 crore.
- This will be done after the law is amended to raise the turnover ceiling for eligibility of composition.
- The law will be amended to raise the ceiling to Rs 2 crore. The limit will be raised immediately after the law amended to Rs 1.5 crore
- Under the scheme, traders, manufacturers and restaurants can pay tax at 1, 2 and 5 percent, respectively.
- The council has also decided to fix a uniform rate of 1 percent for traders and manufacturers.
- The move to widen the turnover threshold is aimed at easing the compliance burden for taxpayers as they will have to file returns only once in a quarter as against monthly returns that needs to be filed by other normal taxpayers.
- However, dealers cannot avail input tax credit, unlike a normal taxpayer.
- Also, traders availing the composition scheme on goods, who also provide small services upto Rs 5 lakh annually, will not be considered ineligible for the scheme.
- GST, billed as the country's biggest indirect tax overhaul, has consolidated a dozen of state and central duties into one single levy.
- ll goods and services have been fitted into four broad slab structure - 5, 12, 18 and 28 percent -along with a cess on luxury and demerit goods such as tobacco, pan masala and aerated drinks.