Changes in GST - 22nd GST Council Meeting

Amidst the much chaos and turmoil wandering around GST rate slabs and other complexities which are now slowing popping up, the GST Council had its 22nd GST Council meeting under the chairmanship of the Union Minister of Finance and Corporate Affairs, Mr. Arun Jaitley in New Delhi on 6th October 2017.

The declarations circled around Composition Scheme, relaxed norms for SMB segment, lessened tax rates for some supplies and few other facilitation measures. The Council issued a 12 point comprehensive press release, of which the excerpts are as follows:

Composition Scheme:

1. The threshold annual turnover for participating in the composition scheme has been increased to Rs. 1 crore from Rs. 75 lakhs. The limit for composition scheme participants in the special category states have also been increased to Rs. 75 lakhs from Rs. 50 lakhs except Jammu and Kashmir and Uttarakhand. The due date for participating in this refreshed composition scheme has been finalized as 31st March 2018. The option once exercised shall become operational from the first day of the month immediately succeeding the month in which the option to avail the composition scheme is exercised.

   The return GSTR-04 is to be filed by the new composite tax payers only for that portion of the quarter from when the scheme applies and will be filing returns as a normal tax payer for the preceding tax period.

   The relaxed and increased threshold has been done after the unanimous loud voices from PAN India business associations and feedback from industry experts and business societies. It will surely widen the reach of benefits of the composition scheme to larger sections of the society, particularly the MSME sector.

2. Earlier, anyone who fulfilled all the criteria of the Composition Scheme but was providing any exempt service [extending deposits to bank which generate interest] was ineligible to opt for the Composition Scheme. However, such persons have now been qualified and can now opt for it.
3. To constantly monitor, improve and amplify the benefits of the Composition scheme, a special body GOM [Group of Ministers] shall be formed.

Relaxed norms for small and medium businesses:

1. Earlier anyone making an inter-state supply [except an inter-state job worker] was mandatorily required to enroll for GST, irrespective of the turnover. The Council announced to exempt those service provider from registering, where the annual turnover is within 20 lakhs [ 10 lakhs for special category states, barring Jammu and Kashmir], in case of an inter-state supply of services too. The move will surely cut the compliance costs for smaller businesses.
2. For the time being, all the tax payers would be filing GSTR-3B monthly, until December’17 and also file GSTR -01, 02 and 03 for July, August and September 2017. Due dates for July’17 have already been declared and for August and September ’17 the due dates would soon be announced.To ease and smoothen the return filing process for the SMB segment, the businesses with an annual turnover of Rs. 1.5 crore would now be filing returns for only once a quarter via forms GSTR-01, 02 and 03 starting from the third quarter [October – December 2017] of this financial year. Though the due dates for this quarterly return filing are still to be announced.
3. The reverse charge under Section 9(4) module have been deferred till 31st March 2018, until the committee revisits and re-reviews its applicability and implications.
4. There have been relaxations on the advances received front too, which was attracting GST earlier and was really cumbersome upon the tax payers. Now, the businesses up to an annual turnover of Rs. 1.5 crore have been exempted to pay GST on the advances received and GST will only be applicable and payable, when the actual supply of goods happen.
5. GTAs [Goods Transport Agencies] were not supporting and providing services to the unregistered entities and this was causing a major mess in the social and economic fabric. Now, the services of a GTA are exempted from GST and they can now fearlessly render their services to everyone.

Other facilitating measures:

1. The registration and operationalization of TDS/TCS provisions is postponed till 31st March 2018 to give the much needed breathing space to the trade, industry and government departments to soundly prepare and equip themselves.
2. The e-way bill module shall be launched and applicable in a beta version from 1st January 2018 and rolled nationwide from 1st April 2018, giving the business society much time to become accustomed from GST.
3. The due date to file return for a composite tax payer for July-September 2017 is extended to 15th November 2017 in the form GSTR-04. The due date to file return for an input service distributor for July-September 2017 is also extended to 15th November 2017 in the form GSTR-06.
4. Needed amendments have been made in the invoice rules to ease the tax payers.

All the measures taken in this 22nd GST Council meeting are aimed to bring much relief and calm down the business society at large, which is struggling enough to keep pace with the new generation taxation regime. The government seems to be sensitive towards the business community and is probably doing and bringing its best foot forward time to time.