Economy

Panel for composition scheme tax cut,12% GST on AC eateries

Panel of state finance ministers suggested fresh changes on Sunday to the Goods and Services Tax (GST), including a cut in the levy at restaurants and a flat 1% tax for small traders, manufacturers and eateries that opt for the less onerous composition scheme.

The scheme, which offers easier compliance, has received a lukewarm response, prompting the GST Council to give it a re-look.

Currently, the threshold for the composition scheme, which had earlier been Rs 75 lakh, stands at Rs 1 crore.

The option of paying a single tax on revenue of all goods, termed the composition scheme, was specially devised for small businesses and its objective was primarily to make GST compliance easy.

For traders, it recommended a lower rate of 0.5 per cent in the case of a cumulative turnover of exempted and non-exempted goods, and one per cent for non-exempted goods.

The other members of the GoM are Bihar Deputy Chief Minister Sushil Modi, Jammu and Kashmir Finance Minister Haseeb Drabu, Punjab Finance Minister Manpreet Singh Badal and Chhattisgarh Minister of Commercial Taxes Amar Agrawal. But the unintended outcome of these recommendations, if adopted by the GST Council, will be more complexity, not less.

The group of ministers, constituted by the Council, has suggested allowing interstate sales for composition dealers.

There are over 1 crore registered businesses under the GST, which has amalgamated over a dozen taxes to make India a single market for seamless flow of goods and services. "Hence, dealers should be allowed to make interstate sales", said Sarma.

However, the GoM, headed by Assam Finance Minister Himanta Biswa Sarma, has also recommended that rates applicable under the composition scheme be tweaked as well.

"We feel that restaurants must continue to get input tax credit". "But, the Council should decide what should be the slab of tax, considering the revenue loss", Sarma added.

Sarma said that on one issue - allowing enterprises in the composition scheme to avail of input tax credits on business-to-business transactions-the panel could not reach a consensus and that this matter will be referred back to the GST Council. For example, it is not very clear how filing of GST returns on a quarterly basis will help if taxes still need to be paid and filed monthly. Additionally, it suggested a reduction in late filing fees to Rs 50 per day, against Rs 200 at present. Establishments can now sign up for the scheme by 31 March 2018, an extended deadline provided by the panel. In early October, it slashed rates on 27 items and eased the frequency of filing returns to four every year from twelve for firms with an annual turnover of less than Rs 1.5 crore.

While a regular taxpayer has to pay taxes on a monthly basis, a composition supplier is required to file only one return and pay taxes on a quarterly basis. Besides, there is no requirement of invoice-wise details or Harmonised System of Nomenclature codes in their returns. The scheme is optional under which manufacturers other than those of ice cream, pan masala and tobacco products have to pay a 2 percent tax on their annual turnover.



Like this

Latest


30 October 2017
Plaque honoring him must go — George Washington's church
The controversial decision to remove the plaques was shared with congregants on Sunday, and an uproar over the matter soon ensued. Washington, who led American forces against the British in the revolutionary war from 1776 to 1783, also owned slaves.

30 October 2017
Northam leads Gillespie by 17 in Virginia gov race
This is not the first time Virginia Democrats have suggested Gillespie and President Donald Trump are tied to white supremacists. Quinnipiac conducts polls in eight key swing states and this year, Virginia's Governor's race is getting a lot of attention.

30 October 2017
New Call of Duty WWII Carentan Trailer Released; DLC 1 Info Revealed
We'll keep an eye out how this will transpire once Call of Duty: WWII releases this coming November 3. The map pack will then arrive on other platforms a month later.

30 October 2017
New research suggests Dagga users have more SEX!
The answers were obtained from 28,176 women with an average age of 29.9 and 22,943 men with an average age of 29.5. In other words, pot users are having about 20 per cent more sex than pot abstainers, Prof Eisenberg noted.

30 October 2017
'Stranger Things' Star Charlie Heaton Has a Secret Child With Former Bandmate
Filming the drama in Los Angeles means Charlie rarely sees his son, who lives with his mum, also 23, in London. He met Akiko when he was just a teen and fell head over heels in love.

30 October 2017
Justin Bieber and Selena Gomez Enjoy Another Outing Together at Church
They allegedly got back into contact after SG's kidney transplant this summer , and nobody on the brunette beauty's side is happy about it.

30 October 2017
EA Hurting Star Wars Way More Than Disney!
Star Wars Battlefront II will be available worldwide on November 17, 2017 on PlayStation 4, Xbox One, and on Origin for PC. Star Wars Battlefront 2Heroes are born on the battlefront, and in Battlefront 2, you're able to experience it for yourself.

30 October 2017
Cooper Cronk To The Roosters Is A Done Deal
Cooper Cronk has put pen to paper on a two-year deal with the Sydney Roosters , according to 9News sports reporter Danny Weidler. With Cronk signing on, the future of current Roosters' number seven Mitchell Pearce remains up in the air.

30 October 2017
Sucker Punch's Latest Take On Samurais: Ghost Of Tsushima Coming To PS4
With the Mongol Empire invading the island of Tsushima, you must take the fight to them to secure the freedom of Japan. After years of being left in the dark as to what Sucker Punch is working on, we finally have an answer.

30 October 2017
Punjab: 16-year-old girl dies after gangrape; case registered
As per the complaint, the victim was taken to nearby fields where she was gangraped by the three youth. She is said to have died of profuse bleeding.



Recommended