PM, Jaitley put common people into trouble: Cong on GST council meet

PM, Jaitley put common people into trouble: Cong on GST council meet

The GST Council reduced the GST from 12 per cent to 5 per cent, where material component was less and labour component is more than 25 per cent.

Almost 400 small-scale industrialists joined hands and protested against the GST and also burnt the effigy of Finance Minister Arun Jaitley.

India announced a significant revamp of the goods and services tax (GST) regime three months after it was rolled out, addressing key complaints, especially those of small-scale industry and exporters.

The Goods and Services Tax (GST) Council on Friday raised the threshold limit for Composition Scheme to Rs 1 crore and allowed quarterly return filing for traders having Rs 1.5 crore turnover to ease the tax filing for small traders. A food trader for instance, may be selling unbranded food pro ducts such as flour and daal along with packed and branded items, which face GST.

The announcements come two days after PM Modi said that the government will graciously accept criticism on the economic front, and will review GST procedures and remove all bottlenecks.

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In addition, states have the discretion to impose more taxes over and above the GST, the Congress leader said adding that a case in point being the entertainment tax imposed by Tamil Nadu and registration tax imposed by Maharashtra. He added that 2 per cent tax will be applicable on manufacturing companies under composition scheme while 5 per cent tax will be applicable on restaurants under the same scheme.

Not only this, the Council also reduced the tax rates of 27 items paving the way for reduction in their price.

GST on unbranded namkeen, unbranded ayurvedic medicine, sliced dried mango and khakra has been cut to 5 per cent from 12 per cent, while the same on man-made yarn used in textile sector has been reduced to 12 per cent from 18 per cent. A large number of traders and businessmen were very disappointed with the apparent effects of demonetization and how the Goods and Services tax was implemented earlier in 2017. Therefore, the GST Council took the decision to increase the threshold for small business to Rs. 1 crore under the composition scheme from the current Rs.75 lakh, he said. Mr. Jaitley also announced the creation of a Group of Ministers that will look into various other problems that have arisen during the rollout of GST. This measure is expected to significantly reduce the compliance cost of small service providers.

However, to claim the input tax credit on inputs used in the manufacture of exported finished goods, exporters either have to pay IGST, which can be claimed as refund after the goods have been exported, or export under bond/Letter of Undertaking (LUT) without payment of IGST. GST rate has also been brought down for Gujarati dishes like khakhra. In the simplest of terms, the Composition Scheme is a "less paperwork" initiative that offers an option to small businesses to opt to pay a fixed percentage of turnover as fees/levy instead of tax and get relief from complicated tax compliance procedures.

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