Jaitley after GST council meet: Exporters to get e-wallets from April, 2018

The GST Council on Friday eased rules for exporters and gave relief to small and medium scale enterprises (SMEs) on filing returns and paying taxes, 3 months after the Goods and Services Tax legislation came into effect since July 1.

In the 22nd GST Council meeting, taxes were cut on more than two dozen items.

The government will initiate an e-wallet facility for all exporters from April 1, 2018, Union Finance Minister Arun Jaitley said on Friday after the completion of the meeting.

"Compliance burden of medium and small taxpayers in GST is being reduced", Jaitley told reporters after the 22nd meeting of the Council.

Jaitley conceded that there had been blockage in credit of exporters which was affecting their cash liquidity. Small and Medium Enterprises (SMEs) with Rs 1 crore turnover will have to file quarterly returns, the Finance Minister said.

HIGHLIGHTS OF JAITLEY's SPEECH:

• Big taxpayers, who contribute 94-95 per cent of the total taxes, will continue to file monthly returns and pay taxes on a monthly basis.

• For the remainder of the fiscal, they will operate under an exempted category paying a nominal 0.1 per cent GST. From April 1, attempt would be made to launch an e-wallet facility for the exporters to provide liquidity.

• Exporters, who have been facing sluggish growth due to global slowdown, will get refunds for the tax paid by them on exports during July and August by October 18.

• Government contracts involving high amount of labour will be charged 5 per cent GST instead of 12 per cent in order to contain the cost of those programmes.

• Job works like zari, imitation, food items and printing items would attract 5 per cent tax instead of 12 per cent.

• Food packets given to school kids under Integrated Child Development Scheme (ICDS) will attract 5 per cent tax instead of 12 per cent.

• Tax on stationery items, stones used for flooring (other than marble and granite), diesel engine parts and pump parts has been cut to 18 per cent from 28 per cent. GST on e-waste has been slashed to 5 per cent from 28 per cent.

• GST on unbranded ayurvedic medicines to be reduced from 12 per cent to 5 per cent.

• Members wanted to revisit tax structure of restaurants with more than Rs 1 crore turnover, will be reviewed.

• Man-made yarn, which was taxed 18 per cent, has now been put in the 12 per cent slab. It will have an effect on textiles.

• E-way bill was discussed in the meeting, Karnataka is already having a good experience with it. After Jan 1, it will go to other states; will try to implement by April 1.

• Traders to pay 1 per cent, manufacturers 2 per cent and restaurants 5 per cent under composition scheme. The scheme allows small taxpayers to pay GST at a fixed rate of turnover and not go through the tedious GST formalities. The scheme cannot be opted by supplier of services other than restaurant related services; manufacturer of ice cream, pan masala, or tobacco; casual taxable person or a non-resident taxable person; and businesses which supply goods through an e-commerce operator.

• 90 per cent of the assesses, who have turnover less than Rs 1.5 crore turnover to file quarterly returns.They will not have to pay tax according to the current provision of monthly filings.

• The limit for turnover for business to avail of in composition scheme, which allows them to pay 1-5 per cent tax without going through tedious formalities, was raised from Rs.75 lakh to Rs. 1 crore.

• We tried to resolve problems of exporters. Refunds of exporters were slow. There has been blockage in credit of exporters which affects their cash liquidity.

• Exporter refunds will be expedited, advance tax refund for exporters from October 10.

• SMEs with Rs 1 crore turnover to file quarterly returns. The switch-over to quarterly tax filing for small and medium businesses would happen from October 1 and they will have to file monthly returns for the first three months of GST, which was implemented from July 1.

• The past 3 months were a transitional phase were a transitional phase for GST, which is why the pattern of collection (of GST) was not clear.

DEALERS OF GEM STONES, JEWELLERY EXEMPTED FROM MONEY LAUNDERING ACT

With an eye on the Gujarat polls, the government put gem and jewellery dealers out of the Prevention of Money Laundering Act (PMLA) in the GST Council meeting.

The move is believed to be timed with a view to the wooing voters in the upcoming Gujarat assembly election as the development will particularly impact traders in the state.

In doing so, the government rolled back the previous notification, according to which dealers in precious metals, precious stones and other high value goods were notified as persons carrying on designated business and professions under the Prevention of Money Laundering Act, 2002.

#UPDATE Any person buying jewellery above Rs 50,000 will not be required to submit PAN or Aadhar Card details #GSTCouncilMeet- ANI (@ANI) October 6, 2017

The Centre will issue a fresh notification separately after carefully considering the points raised during the meeting and by holding wider stakeholder consultations in this regard.

According to the notification which has been rolled back, any dealer of precious metals, precious stones and other high-value goods with a turnover of Rs 2 crore or more in a financial year was to be covered under the Act.

The limit of Rs 2 crore was to be calculated on the basis of the previous year's turnover, according to the notification.

(WITH INPUTS FROM RAHUL SHRIVASTAVA AND PTI)

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