The revisions and rollbacks in the GST regime have brought welcome relief to small businesses, but they must brace themselves for a hard ride.
With criticism mounting of the poor implementation of the Goods and Services Tax (GST) during the first hundred days of the new regime, the GST council, chaired by finance minister Arun Jaitley, announced changes in the structure and policy of the tax on October 6. A damage-control measure such as this was expected sooner rather than later, especially with some state assembly elections around the corner. The latest announcements are aimed at providing relief to exporters and small businesses and reducing tax rates on 27 commodities. But are these measures enough to mitigate the pain these sectors have experienced since the GST rollout on July 1?
SOME RELIEF FOR SMEs
Under the original GST guidelines, small and medium enterprises (SMEs) with an annual turnover of upto Rs 75 lakh could avail of a composition scheme, under which they were liable to pay a flat tax rate of 1 to 5 per cent. However, there was no scope for claiming input tax credits (ITC) (a reduction in the tax burden based on taxes already paid on inputs) under this scheme. Also, this scheme was not available to those making inter-state supplies. Further, those doing business with unregistered suppliers were liable to pay GST via the reverse charge mechanism—ordinarily, suppliers must pay GST on sales, but in the case of unregistered suppliers, the recipient of the goods/ services must pay the tax. A plea had been made to withdraw these disruptive clauses.
This story is from the October 23, 2017 edition of India Today.
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This story is from the October 23, 2017 edition of India Today.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
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