The Council is also likely to assess the improvements in GST Network's functioning, officials said
New Delhi: A day-long meeting of the powerful GST council to revisit compliance rules for businesses and make what have been described as "structural changes" in the new national tax regime, has concluded. The review comes after feedback and complaints from businesses and amid criticism from the opposition over the way GST has been implemented. The focus today is on providing relief to small traders and exporters. Many states have backed demands to relax rules that require three tax returns to be filed every month, and Telangana Finance Minister E Rajinder said businesses with a turnover of up to 1.5 crores doing inter-state trade are likely to be allowed quarterly filings.
Here are the 10 points on this meeting:
- Union Finance Minister Arun Jaitley is expected to announce today's decisions in a short while from now. Mr Jaitley heads the GST council, which has as members state finance ministers and officials from both states and the Centre.
- Andhra Pradesh Finance Minister Y Ramakrishnudu told reporters that there was consensus at the meeting on raising the threshold for the composition scheme - which allows small traders to pay a standard tax rate - from Rs. 75 lakh in turnover 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 Goods and Services Tax to check tax evasion.
- The GST rates for textiles and some other items may be revised by the council. It is also likely to recommend relaxation for exporters so that their working capital locked up in refunds is released. It is also expected to allow electronic payment of taxes.
- Today's review comes two days after Prime Minister Narendra Modi promised that GST glitches would be fixed. He held a meeting yesterday with Finance Minister Arun Jaitley and BJP chief Amit Shah.
- As he made a strong defence of the government's economic policies on Wednesday, PM Modi also promised to fix problems in GST cited by businesses. "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 has said.
- Earlier this week central bank RBI cautioned that "teething problems" with GST had impacted the manufacturing sector. The RBI governor has suggested simplifying GST to boost growth.
- At a meeting last week with Finance Minister Arun Jaitley, industry bodies and exporters had asked for quicker refund of duties, deferment of filing of GST returns for six months.
- The course correction comes against the backdrop of stinging attacks on the government for what the opposition alleges was a hurried and sloppy implementation of the mega tax reform. Two former union ministers Yashwant Sinha and Arun Shourie criticised the government's handling of the economy with Mr Sinha alleging that a "badly-conceived and poorly-implemented GST" was playing havoc with businesses.
- Yesterday, the World Bank said that the recent slowdown in India's economic growth is an "aberration" and mainly due to a temporary disruption caused by preparations for GST. It also stated that it will get corrected in the coming months.
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