Exporters relieved as government moves to lower GST burden

Saturday, 07 Oct, 2017

The government also wants to support exports, which reported a 10.29% jump in August to $23.8 billion from a year ago. A technology company will be hired to launch an e-wallet scheme by April 2018 with notional tax credits that exporters can use to procure goods without actually incurring a tax burden.

Today's GST Council Meeting has given relief to SMEs and Exporters.

Exporters had said that Rs 65,000 crore could get stuck in the July-October period if the current mechanism of refunds for GST continues. Similarly, the benefit of five per cent GST on hoteliers has been increased by enhancing the turnover limit.

"The collection pattern observed so far shows that a substantial portion of the tax is coming from the big players", Mr Jaitley said. "We will examine if this can be lowered", Jaitley said. "So, we have taken a few decisions to reduce this burden on them".

The composition scheme is an alternative method of the levy of tax designed for small taxpayers whose turnover is up to Rs 75 lakh; Rs 50 lakh in the case of eight north-eastern states and Himachal Pradesh. The package for exporters is based on suggestions by the panel led by revenue secretary Hasmukh Adhia, another government official said on condition of anonymity. Three types of businesses come under this scheme - trading on which 1 per cent tax would be given, on manufacturing 2 per cent and on restaurant business 5 per cent.

# Service providers with turnover less than Rs 20 lakh are exempt from inter-state service. "It needs to be seen that how the other issues which have reached different courts in the country are addressed in the days to come". Accordingly, the government need not be informed on the purchase of jewellery for over Rs50,000.

The council deliberated on GSTN glitches and issues faced by exporters.

In the service sector, composition scheme is available only for one sector - restaurants.

E-way bill nullifies the aim of the GST single tax regime, Chief Minister Manohar Parrikar said on Thursday, adding that he would "strongly oppose" it at the next GST council meeting.

The GoM would give its recommendations within two weeks. He said, items including Khakhra, plain chapati, food packets used in ICDS scheme and unbranded Namkeen will now be taxed at 5 percent instead of 18 percent. Small scale enterprises and exports were two major concerns among them.

Taking stock of the exporters' working capital that was blocked under the GST, thus affecting cash liquidity, the Council has chose to disburse their refunds through checks for July and August from October 10 and October 18 onwards, respectively. A technology firm will develop the e-wallet.