The 29th GST Council meeting chaired by Union finance minister Piyush Goyal was held at New Delhi on the 4th August, 2018. The meeting was aimed to address the issues of the Micro, Small and Medium Enterprises (MSMEs).
Key decisions taken by council in the meeting
Incentivizing digital transactions
Federal indirect tax body the GST Council, keeping in mind the end goal of digitalization of the economy, enhancing tax compliance and elevating the collection of tax has decided to incentivize digital payments of tax. The council came up with plan to roll out a pilot project for refunding 20% of GST paid on business-to-consumer transactions through RuPay card, BHIM mobile application, unified Payment Interface (UPI), debit card etc.
To implement this, the IT system has to get ready first. Therefore, government will develop the software in assistance with NPCI to process the cashback. The cashback is subject to a cap of INR 100.
Addressing MSME issues
The Micro, Small and Medium Enterprises (MSMEs) play a significant role in country’s development, by the volume of revenue & employment it generates. The sector contributes to half of the exports and around 29% of the GDP.
The GST council has decided to form a new panel to examine a series of tax and compliance relief proposals pertaining to MSME and small traders. Panel to be chaired by union minister of state for finance Shiv Pratap Shukla will examine all proposals received so far regarding tax relief including the proposal to give relief to MSMEs with sales up to INR 1.5 crores from the central GST (CGST). This would restore the excise duty exemption available to these businesses in the pre-GST era.
This penal will do in depth study of the issues related to MSMEs and small taxpayers and thereafter will submit their findings and recommendations before GST Council.
No GST rate cut
Owing to lower GST revenues, no decisions were taken on the rate cut or rate rationalization. Also, there was no discussion on the GST return filing form simplification either.
The next meeting of the GST Council will be held on 28-29 September in Goa. For further updates stay tuned here!
For any query on this, reach our GST advisors.