12 Major Changes in GST and Revised Rates of 27 Goods & 12 Services

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Recommendations and changes in GST made by the GST Council in its 22nd Meeting held on 6th October 2017 under Chairmanship of the Union Minister of Finance and Corporate Affairs, Shri Arun Jaitley in Delhi.

Following are 12 Major changes in GST

  1. The composition scheme:

    It shall be made available to taxpayers having an annual aggregate turnover of up to Rs. 1 crore as compared to the current turnover threshold of Rs. 75 lacs. This threshold of turnover for special category States, except Jammu & Kashmir and Uttarakhand, shall be increased to Rs. 75 lacs from Rs. 50 lacs. The turnover threshold for Jammu & Kashmir and Uttarakhand shall be Rs. 1 crore. The facility of availing composition under the increased threshold shall be available to both migrated and new taxpayers up to 31.03.2018.
    The option once exercised shall become operational from the first day of the month immediately succeeding the month in which the option to avail the composition scheme is exercised. New entrants to this scheme shall have to file the return in FORM GSTR-4 only for that portion of the quarter from when the scheme becomes operational and shall file returns as a normal taxpayer for the preceding tax period. The increase in the turnover threshold will make it possible for the greater number of taxpayers to avail the benefit of easier compliance under the composition scheme and is expected to greatly benefit the MSME sector.
  2. Persons who are otherwise eligible for composition scheme but are providing any exempt service (such as extending deposits to banks for which interest is being received) were being considered ineligible for the said scheme. It has been decided that such persons who are otherwise eligible for availing the composition scheme and are providing any exempt service, shall be eligible for the composition scheme.

  3. A Group of Ministers (GoM) shall be constituted to examine measures to make the composition scheme more attractive.
  4. IGST exempted on interstate services up to the turnover limit:

    Presently, anyone making inter-state taxable supplies, except inter-State job worker, is compulsorily required to register, irrespective of turnover. It has now been decided to exempt those service providers whose annual aggregate turnover is less than Rs. 20 lacs (Rs. 10 lacs in special category states except for J & K) from obtaining registration even if they are making inter-State taxable supplies of services. This measure is expected to significantly reduce the compliance cost of small service providers.

  5. Ease of payment and return filing for small and medium businesses:

    turnover up to Rs. 1.5 crores, it has been decided that such taxpayers shall be required to file quarterly returns in FORM GSTR-1,2 & 3 and pay taxes only on a quarterly basis, starting from the Third Quarter of this Financial Year i.e. October-December, 2017. The registered buyers from such small taxpayers would be eligible to avail ITC on a monthly basis. The due dates for filing the quarterly returns for such taxpayers shall be announced in due course. Meanwhile, all taxpayers will be required to file FORM GSTR-3B on a monthly basis until December 2017. All taxpayers are also required to file FORM GSTR-1, 2 & 3 for the months of July, August and September 2017. Due dates for filing the returns for the month of July 2017 have already been announced. The due dates for the months of August and September 2017 will be announced in due course.

  6. The reverse charge mechanism under sub-section (4) of section 9 of the CGST Act, 2017 and under subsection (4) of section 5 of the IGST Act, 2017 shall be suspended till 31.03.2018 and will be reviewed by a committee of experts. This will benefit small businesses and substantially reduce compliance costs.

  7. The requirement to pay GST on advances received is also proving to be burdensome for small dealers and manufacturers. In order to mitigate their inconvenience on this account, it has been decided that taxpayers having annual aggregate turnover up to Rs. 1.5 crores shall not be required to pay GST at the time of receipt of advances on account of supply of goods. The GST on such supplies shall be payable only when the supply of goods is made.

  8.  It has come to light that Goods Transport Agencies (GTAs) are not willing to provide services to unregistered persons. In order to remove the hardship being faced by small unregistered businesses on this account, the services provided by a GTA to an unregistered person shall be exempted from GST.
    *Other Facilitation Measures*
  9. Registration and operationalization of TDS/TCS provisions shall be postponed till 31.03.2018.
  10. The e-way bill system shall be introduced in a staggered manner with effect from 01.01.2018 and shall be rolled out nationwide with effect from 01.04.2018. This is in order to give trade and industry more time to acclimatize itself with the GST regime.

  11. The last date for filing the return in FORM GSTR-4 by a taxpayer under composition scheme for the quarter July-September, 2017 shall be extended to 15.11.2017. Also, the last date for filing the return in FORM GSTR-6 by an input service distributor for the months of July, August, and September 2017 shall be extended to 15.11.2017.

  12. Invoice Rules are being modified to provide relief to certain classes of registered persons.

List of revised GST rates for 27 Goods and 12 Services:

 

1) Mango sliced dried

Old rate: 12%

New rate: 5%

2) Khakra and plain chapati

Old rate: 12%

New rate: 5%

3) Food preparations put up in unit containers and intended for free distribution to economically weaker sections of the society under a programme duly approved by the Central Government or any State Government, subject to specified conditions

Old rate: 18%

New rate: 5%

4) Namkeens other than those put up in unit container and, –

> bearing a registered brand name; or

> bearing a brand name on which an actionable claim or enforceable right in a court of law is available [other than those where an actionable claim or enforceable right in respect of such brand name has been foregone voluntarily

Old rate: 12%

New rate: 5%

5) Imposing GST only on the net quantity of superior kerosene oil [SKO] retained for the manufacture of Linear Alkyl Benzene [LAB]

Old rate: 18%

New rate: 18% (Clarification to be issued)

6) Ayurvedic, Unani, Siddha, Homeopathy medicines, other than those bearing a brand name

Old rate: 12%

New rate: 5%

7) Poster Colour

Old rate: 28%

New rate: 18%

8) Modelling paste for children amusement

Old rate: 28%

New rate: 18%

9) Plastic waste, parings or scrap

Old rate: 18%

New rate: 5%

10) Rubber  waste, parings or scrap

Old rate: 18%

New rate: 5%

11) Hard Rubber waste or scrap

Old rate: 28%

New rate: 5%

12) Paper waste or scrap

Old rate: 12%

New rate: 5%

13) Duty credit scrips

Old rate: 5%

New rate: Nil

14) Sewing thread of man-made filaments, whether or not put up for retail sale

Old rate: 18%

New rate: 12%

15) All synthetic filament yarn, such as nylon, polyester, acrylic, etc.

Old rate: 18%

New rate: 12%

16) All artificial filament yarn, such as viscose rayon, Cuprammonium,

Old rate: 18%

New rate: 12%

17) Sewing thread of man-made staple fibers

Old rate: 18%

New rate: 12%

18) Yarn of man-made staple fibers

Old rate: 18%

New rate: 12%

19) Real Zari

Old rate: 12%

New rate: 5%

20) All goods falling under heading 6802 [other than those of marble and granite or those which attract 12 percent GST]

Old rate: 28%

New rate: 18%

21) Cullet or other waste or scrap of Glass

Old rate: 18%

New rate: 5%

22) Fittings for loose-leaf binders or files, letter clips, letter corners, paper clips, indexing tags and similar office articles, of base metal; staples in strips (for example, for offices, upholstery, packaging), of base metal

Old rate: 28%

New rate: 18%

23) Plain Shaft Bearing 8483

Old rate: 28%

New rate: 18%

24) Parts suitable for use solely or principally with fixed Speed Diesel Engines of power not exceeding 15HP

Old rate: 28%

New rate: 18%

25) Parts suitable for use solely or principally with power driven pumps primarily designed for handling water, namely, centrifugal pumps (horizontal and vertical), deep tube-well turbine pumps, submersible pumps, axial flow and mixed flow vertical pumps

Old rate: 28%

New rate: 18%

26) E-Waste

Old rate: 28/18 %

New rate: 5%

27) Biomass briquettes

Old rate: 18 %

New rate: 5%

 

The Council also rationalized GST rates on 12 job work services:

 

  1. Job work services in relation to all products falling in Chapter 71 (including imitation jewelry) – 5%
  2. Job work services in relation to food and food products falling under Chapters 1 to 22 of the HS Code (except packing of processed milk into packets) – 5%
  3. Job work services in relation to products falling under Chapters 23 of the HS Code except dog and cat food put up for retail sale – 5%
  4. Job work in relation to manufacture of umbrella – 12%
  5. Job work in relation to manufacture of clay bricks falling under CTH 69010010 – 5%
  6. Services by way of printing on job work basis or on goods belonging to others in relation to printing of all goods falling under Chapter 48 or 49, which attract GST @ 5% or Nil – 5%
  7. Services by way of printing on job work basis or on goods belonging to others in relation to printing of all goods falling under Chapter 48 or 49, which attract GST @ 12% – 12%
  8. Services by way of printing on job work basis or on goods belonging to others in relation to printing of goods falling under Chapter 48 or 49, other than those covered by (6) and (7) above – 18%
  9. Services by way of printing in relation to printing of all goods falling under Chapter 48 or 49, which attract GST @ 5% or Nil, where only content is supplied by the publisher and the physical inputs including paper used for printing belong to the printer – 12%
  10. Services by way of printing of all goods falling under Chapter 48 or 49 which attract GST @12%, where only content is supplied by the publisher and the physical inputs including paper used for printing belong to the printer – 12%
  11. Services by way of printing of all goods falling under Chapter 48 or 49 which attract GST @18% or above, where only content is supplied by the publisher and the physical inputs including paper used for printing belong to the printer – 18%
  12. To issue a clarification with regard to classification of printing products/services.

(Source: Mr. Dippak Gupta FB Post https://www.facebook.com/prof.dippak/posts/1542767279095038

moneycontrol and  http://www.gstcouncil.gov.in )

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