It allows small taxpayers to pay GST at a fixed rate of turnover and not go through the tedious GST formalities.
"Government jobs involving high element of labour have been changed from 18 per cent to 12 per cent".
Quoting sources moneycontrol.com reported that the GST rate on some handicraft items may be cut to 5 percent from 12 percent.
Stationary items, flooring stones other than marble and granites, parts of diesel engine and pumps will now attract 18 per cent GST against the present rate of 28 per cent, Jaitley added.
Under the composition scheme, the tax rate for traders of goods will be 1 per cent, 2 per cent for manufacturers and 5 per cent for restaurants and suppliers of food or drinks. Today's recommendations will immensely help small and medium business. This threshold of turnover for special category States, except Jammu & Kashmir and Uttarakhand, shall be increased to Rs. 75 lacs from Rs. 50 lacs. Pratik Jain, leader, indirect tax, PwC, said: "Deferring reverse charge mechanism on purchases from unregistered dealer is a step in the right direction, which will avoid complex paperwork by purchasers". The official said that there is no need to worry about the shortfall as there is a provision that in the first five years, the Centre will compensate for the revenue loses.
Responding to the concerns of the small exporters regarding the capital blockage due to the GST, The Finance Ministry said that the blocked refund of IGST paid on goods exported outside India in July would begin to be reimbursed from next week.
Following the day-long meeting of the GST Council, Jaitley told reporters that this would be an interim relief, and as a long term measure e-wallets will be created for all exporters by April 1, 2018, to carry forward the refund process. It will be given a notional amount as advance refund.
Such businessmen will submit a tax return by depositing a percentage of total sales once in three months. The registered buyers from such small taxpayers would be eligible to avail ITC on a monthly basis. Members examined the provisions and after detailed study we found that large companies/taxpayers contribute to 94-97 per cent of the taxes filed.
# Service providers with turnover less than Rs 20 lakh are exempt from inter-state service.
Service providers can not opt for the composition scheme.
After assessing the readiness of the trade, industry and government departments, it has been decided that registration and operationalisation of TDS/TCS provisions shall be postponed till March 31, 2018.