In the 23rd GST Council Meeting, GST rate reduction for various goods and services was announced. A major highlight of the 23rd GST Council Meeting was the reduction of GST rates for various goods listed under the 28% slab. The GST rates changes will tremendously reduce the tax burden on the common man and boost the economy. In this article, we look at a summary of GST rate changes announced in the 23rd GST Council Meeting held on 10th November 2017.
Highlights of the 23rd GST Council Meeting
The goods and services on the 28% slab list were severely reduced to a mere 50 from the previous 228 items, which brought smiles to many faces. The items remaining on the trimmed list now only include luxury and “sin” goods.
Additionally, restaurants will only be taxed at 5%, however, input tax credit will not be available. This reduction will benefit consumers directly with an increase in online food ordering and eating out.
Moreover, the penalty fee for late filing was drastically reduced from Rs200/day to Rs20/day.
Nepal and Bhutan exporters can now avail of input tax credit on output services, also.
The central government will take care of the compliance for diplomatic mission/UN organization, who will each be issued UIN.
A manual filing process for advance ruling, on future or completed transactions, has been introduced.
Registration exemption of service providers whose aggregate turnover is less than Rs. 20 lakhs (Rs. 10 lakhs for special states) now includes e-commerce operators, interstate and intra-state suppliers.
The Recommendations from the 23rd GST Council Meeting
Filing of returns to be simplified
- Taxpayers should file the returns on Form GSTR-3B with the payment of tax by 20th of every month till March 2018.
- Filing of form GSTR-2 and GSTR-3 suspended from the current financial year. However, filing of GSTR-1 will continue for the entire period.
- Taxpayers will be divided into two categories for filling of details in the Form GSTR-1. They are:
- Taxpayers with annual turnover upto or below Rs.1.5 crore need to file GSTR-1 on a quarterly basis.
- Taxpayers with annual turnover more than Rs.1.5 crore need to file GSTR-1 on a monthly basis.
- Facility for the manual filing of the application for the advance ruling introduced for the time being.
- A large number of taxpayers were unable to file their returns in Form GSTR-3B within due date of July, August, and September 2017.Late fee waived in all such cases.It has been decided that where such late fee was paid, it will be re-credited to their Electronic Cash Ledger under “Tax” head instead of “Fee” head so as to enable them to use that amount for the discharge of their future tax liabilities. The software changes for this would be made and thereafter this decision will be implemented.
- For the succeeding months i.e. October 2017 onwards, the amount of late payable by a taxpayer whose tax liability for that month was “NIL” will be Rs.20 per day (Rs. 10 per day each if it is under CGST AND SGST Acts). Earlier it was Rs.200 per day(Rs. 100 per day each if it is under CGST AND SGST Acts).
GST Rate Reduced from 28% to 12%
For the following goods, GST rate has been reduced from 28% to 12%:
- Wet grinders consisting of stone as grinder
- Tanks and other armoured fighting vehicles
GST Rate Reduced from 18% to 12%
For the following goods, GST rate has been reduced from 18% to 12%:
- Condensed milk
- Refined sugar and sugar cubes
- Curry paste, mayonnaise and salad dressings, mixed condiments and mixei seasoning
- Diabetic food
- Medicinal grade oxygen
- Printing ink
- Hand bags and shopping bags of jute and cotton
- Hats (knitted or crocheted)
- Parts of specified agricultural, horticultural, forestry, harvesting or threshing machinery
- Specified parts of sewing machine
- Spectacles frames
- Furniture wholly made of bamboo or cane
GST Rate Reduced from 18% to 5%
For the following goods, GST rate has been reduced from 18% to 5%:
- Puffed rice chikki, peanut chikki, sesame chikki, revdi, tilrevdi, khaza, kazuali, groundnut sweets gatta, kuliya
- Flour of potatoes put up in unit container bearing a brand name
- Chutney powder
- Fly ash
- Sulphur recovered in refining of crude
- Fly ash aggregate with 90% or more fly ash content
Mostly, the decisions rendered during the latest GST council meeting were met with smiles and applause. The cuts and extensions will help to increase compliance, as implementation of GST had left many confused and frustrated business owners in its wake. However, by adopting the help of the experts at H&R Block to delve into the new GST processes, business owners can once again continue to focus their energy and efforts into what they love most, which is developing their business and increasing their customer base.
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