GST
Package for Small Units
[Recommendations made by the GST Council in the 22nd meeting
at New Delhi on 6th October, 2017]
[Press
Release dated 6th October, 2017]
The
GST Council, in its 22nd meeting held at New Delhi on 6th October 2017, has recommended
the following facilitative changes to ease the burden of compliance on small
and medium businesses:
Composition
Scheme
1.
The composition scheme shall be made available to taxpayers having annual
aggregate turnover of up to Rs. 1 crore as compared to the current turnover
threshold of Rs. 75 lacs. This threshold of turnover for special category
States, except Jammu & Kashmir and Uttarakhand, shall be increased to Rs.
75 lacs from Rs. 50 lacs. The turnover threshold for Jammu & Kashmir and
Uttarakhand shall be Rs. 1 crore. The facility of availing composition under
the increased threshold shall be available to both migrated and new taxpayers
up to 31.03.2018. 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. New entrants to this scheme shall
have to file the return in FORM GSTR-4 only for that portion of the quarter
from when the scheme becomes operational and shall file returns as a normal
taxpayer for the preceding tax period. The increase in the turnover threshold
will make it possible for greater number of taxpayers to avail the benefit of
easier compliance under the composition scheme and is expected to greatly benefit
the MSME sector.
2.
Persons who are otherwise eligible for composition scheme but are providing any
exempt service (such as extending deposits to banks for which interest is being
received) were being considered ineligible for the said scheme. It has been
decided that such persons who are otherwise eligible for availing the
composition scheme and are providing any exempt service, shall be eligible for
the composition scheme.
3.
A Group of Ministers (GoM) shall be constituted to examine measures to make the
composition scheme more attractive.
Relief
for Small and Medium Enterprises
4.
Presently, anyone making inter-state taxable supplies, except inter-State job
worker, is compulsorily required to register, irrespective of turnover. It has
now been decided to exempt those service providers whose annual aggregate
turnover is less than Rs. 20 lacs (Rs. 10 lacs in special category states
except J & K) from obtaining registration even if they are making
inter-State taxable supplies of services. This measure is expected to
significantly reduce the compliance cost of small service providers.
5.
To facilitate the ease of payment and return filing for small and medium
businesses with annual aggregate turnover up to Rs. 1.5 crores, it has been
decided that such taxpayers shall be required to file quarterly returns in FORM
GSTR-1,2 & 3 and pay taxes only on a quarterly basis, starting from the
third quarter of this financial year i.e. October-December, 2017. The
registered buyers from such small taxpayers would be eligible to avail ITC on a
monthly basis. The due dates for filing the quarterly returns for such
taxpayers shall be announced in due course. Meanwhile, all taxpayers will be
required to file FORM GSTR-3B on a monthly basis till December, 2017. All taxpayers
are also required to file FORM GSTR-1, 2 & 3 for the months of July, August
and September, 2017. Due dates for filing the returns for the month of July,
2017 have already been announced. The due dates for the months of August and
September, 2017 will be announced in due course.
6.
The reverse charge mechanism under sub-section (4) of section 9 of the CGST
Act, 2017 and under sub-section (4) of section 5 of the IGST Act, 2017 shall be
suspended till 31.03.2018 and will be reviewed by a committee of experts. This
will benefit small businesses and substantially reduce compliance costs.
7.
The requirement to pay GST on advances received is also proving to be
burdensome for small dealers and manufacturers. In order to mitigate their
inconvenience on this account, it has been decided that taxpayers having annual
aggregate turnover up to Rs. 1.5 crores shall not be required to pay GST at the
time of receipt of advances on account of supply of goods. The GST on such
supplies shall be payable only when the supply of goods is made.
8.
It has come to light that Goods Transport Agencies (GTAs) are not willing to
provide services to unregistered persons. In order to remove the hardship being
faced by small unregistered businesses on this account, the services provided
by a GTA to an unregistered person shall be exempted from GST.
Other
Facilitation Measures
9.
After assessing the readiness of the trade, industry and Government
departments, it has been decided that registration and operationalization of
TDS/TCS provisions shall be postponed till 31.03.2018.
10.
The e-way bill system shall be introduced in a staggered manner with effect
from 01.01.2018 and shall be rolled out nationwide with effect from 01.04.2018.
This is in order to give trade and industry more time to acclimatize itself
with the GST regime.
11.
The last date for filing the return in FORM GSTR-4 by a taxpayer under
composition scheme for the quarter July-September, 2017 shall be extended to
15.11.2017. Also, the last date for filing the return in FORM GSTR-6 by an
input service distributor for the months of July, August and September, 2017
shall be extended to 15.11.2017.
12.
Invoice Rules are being modified to provide relief to certain classes of
registered persons.