GST council meet today, small businesses expect some relief: 10 Facts
By Fnf Desk | PUBLISHED: 06, Oct 2017, 9:03 am IST | UPDATED: 06, Oct 2017, 15:11 pm IST
New Delhi: Acting on the complaints from businesses in implementing the massive tax reform, the powerful Goods and Services Tax or GST Council is holding a crucial meeting in Delhi starting 10.30 am to revisit compliance rules for businesses and consider what have been described as "structural changes" in the new tax regime. The review comes days after Prime Minister Narendra Modi spoke about his readiness to fix glitches that were creating problems. The central bank earlier this week also had cautioned that the "teething problems" had impacted the manufacturing sector.
The council, which has state finance ministers as members, is expected to relax the rule that requires businesses to file three returns every month that has caused much heartburn among small traders and given the opposition to target India's biggest indirect tax reform.
The council is expected to have an annual turnover to be the benchmark and businesses with a turnover below this cut-off, would be allowed to file the returns on a quarterly basis, not monthly. Bihar Deputy Chief Minister Sushil Modi, who heads a panel to resolve the IT challenges, says establishments with turnover up to Rs. 1.5 crore should not need to file monthly returns.
Sushil Modi has also announced that the highest decision-making body on GST will also take important decisions on "integrated GST refund" and deliberate on carrying out what he called would be "structural changes in the GST regime".
Just days earlier, PM Modi had promised to make every change that was necessary. "We have seen closely what is working and what is not... We are not orthodox and conservative. We also don't know everything. But if something needs to be done, we shall do it," he had declared.
At a meeting last week with Finance Minister Arun Jaitley who heads the council, industry bodies and exporters had asked for quicker refund of duties, deferment of filing of GST returns for six months.
There were also demands that the cut-off limit for allowing traders to opt for the composition scheme - that lets traders with a turnover of up to Rs. 75 lakh pay a standard tax rate - be raised. There are suggestions this could be increased to Rs. 1 crore.
The council is also expected to consider demands that the reverse charge mechanism be suspended. This rule - which shifts the liability to pay the tax on the buyer rather than the seller - kicks in if a supplier is not registered under GST to check tax evasion.
The course correction comes against the backdrop of stinging attacks on the government for what the opposition calls, was a hurried implementation of the mega tax reform.
Congress leader Rahul Gandhi has accused the government of crushing small business with a complicated process, criticising the need to fill multiple forms under the new rules and has said his party will pressure the government to simplify the procedure.
Over the last week or so, two veterans from the BJP camp, Yashwant Sinha and Arun Shourie, too have spoken out against the government's handling of the economy. Mr Sinha had blamed "badly-conceived and poorly-implemented GST" for playing havoc with businesses.