"GST Council considered the implementation experience of the last three months", finance minister Arun Jaitley said late on Friday, briefing reporters on the decisions of the 22nd meeting of the council.
The GST Council tweaked rules on Friday to make life simpler for small businesses and exporters and also cut rates on 27 products, including man-made yarn, which was a key demand of the textiles sector, in a bid to mollify those complaining about the new tax regime.
Earlier this week, PM Modi in his speech indicated that government is ready to bring relief measures to reduce the problems faced by small businessmen and exporters because of GST.
As per the data available from the department, from July 1 till date, the department has earned Rs 491.79 crore revenue through GST (including Value-Added Tax on petroleum), which is 22 per cent less as compared to similar period- July-September 2016, wherein Rs 628.27 crore were deposited with the state government. "The government has utterly failed to address structural issues of GST reform through fair and transparent consultations", Congress spokesperson Randeep Singh Surjewalal told the media here at the party headquarters.
Many stones used in flooring, except marble and granite - will be now taxed at 18% instead of 28%. The facility is against payment of nominal tax of 0.1% by manufacturers in the supplies to merchants, so that the GST chain is uninterrupted.
Experts believe, the council might enable exporters to utilise benefits and incentives derived from foreign trade policy to pay Integrated GST (IGST), push-back of reverse charge mechanism (RCM) among relaxation to ward off growing resentment among indirect taxpayers.
"Reeling under the lack of market-driven MSP and cycle of indebtedness, no relief has been given to the farmer and agriculture sector from burden of taxes". The scheme allows traders to pay 1 to 5 per cent tax without going through tedious formalities.
# Composition scheme has been relaxed, threshold now at Rs 1 cr from Rs 75 lakh. Increasing minimum tax-slab from 5 to 10 percent may look little harsh, but will provide practically much more relief by withdrawal of higher slabs at 12 and 18 percent.
But not all can opt for the scheme.
Shukla also indicated that the higher GST tax slab of 28 per cent is bound to be gradually reduced as the GST council would evolve alternative mechanism and the next GST Council meeting at Guwahati on November 9-10 would see results on this front. A group of ministers has been tasked to study the modalities for extending the composition scheme on inter-state sales and to rationalise taxes on restaurants.
On the services front, job works such as imitation, zari, food items and printing items will now attract 5% GST instead of 12%. It has now been made a decision to exempt those service providers whose annual aggregate turnover is less than Rs. 20 lakh from obtaining registration even if they are making inter-state taxable supplies of services.