The recommendation made by the GST Council in the 22nd meeting at New Delhi on 6th October 2017. On 6th October 2017, in its 22nd meeting held in New Delhi, the GST Council has recommended the following GST New Changes to lessen the burden of compliance on small & medium businesses.
GST New Changes
1. GST council has made the composition scheme accessible to taxpayers having an annual gross turnover of up to Rs. 1 crore as opposed to the current turnover of Rs. 75 Lakhs. This threshold of turnover for special category states, except Jammu & Kashmir and Uttarakhand, shall be raised to Rs. 75 lakhs from Rs. 50 lakhs. The turnover threshold for Uttarakhand and Jammu & Kashmir 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 31st March 2018. Once the option exercises, it will become operational from the 1st day of the month immediately following the month in which the option to avail the composition scheme is exercised.
New entrants into this scheme will have to file a return in Form GSTR-4 only for the portion of the quarter from when the scheme becomes operational and needs to file a return as a normal taxpayer for the previous tax period. The increase in the turnover threshold will make it possible for a higher number of taxpayers for availing the benefit of easier compliance under the composition scheme and it will benefit the MSME sector significantly.
2. Persons who are otherwise eligible for the composite scheme but providing any of the exempt service (like extending deposits to banks for which interest is received) were ineligible for the composite scheme. GST council has decided that such persons who are otherwise eligible for availing the composition scheme and are providing any exempt service, qualify for the composite scheme.
3. A Group of ministers (GOM) is appointed to examine measures to make the composite scheme more attractive.
Relief for small and medium enterprises ( GST New Changes)
4. Presently, anyone who are making inter-state taxable supplies, except inter-state job worker, is compulsory needs to register, irrespective of turnover. GST council has now decided to exempt those service providers whose annual gross turnover is less than Rs. 20 lakhs (Rs. 10 lakhs in particular category states except for Jammu and Kashmir) from obtaining registration even if they are doing inter-state taxable supplies of services. This measure is presumed to reduce the compliance cost of small service providers significantly.
5. To facilitate the efficiency of payment and return filing for small & medium businesses with annual gross turnover up to Rs. 1.5 crores, it is decided that such taxpayers are required to file returns quarterly in Form GSTR-1, 2 & 3 and shall pay taxes only on a quarterly basis, starting from the 3rd quarter of this FY. i.e., October-December, 2017. The registered buyers from such small taxpayers would be qualified to avail ITC on a monthly basis.
GST council will declare the due dates for filing the returns on a quarterly basis for such taxpayers in due course. Meanwhile, all taxpayers needs to file Form GSTR-3B on a monthly basis until December 2017. All the taxpayers are also needed to file Form GSTR-1, 2 & 3 for July, August, and September 2017. GST council has already announced the due dates for filing the returns for July 2017. The due dates for August and September 2017 will be published in due course.
6. GST council has suspended the reverse charge mechanism under section 9 sub-section 4 of the CGST Act, 2017 and under section 5 sub-section 4 of the IGST Act, 2017 until 31st March 2018 and a committee of experts will examine it. This will benefits small businesses and substantially reduce compliance costs.
7. The need to pay GST on advances received is also burdensome for small dealers and manufacturers. To reduce their inconvenience on this account, GST council has decided that taxpayers who are having an annual total gross turnover up to Rs. 1.5 crores do not require to pay GST at the time of receipt of advances on account of supply of goods, . The GST on such supplies is payable only when the taxpayers supply the goods.
8. It has come to the knowledge that Goods Transport Agencies (GTA) are not willing to provide services to unregistered persons. To remove this difficulty for small unregistered businesses on this account, the GST council has exempted the services from GST that GTA provides to an unregistered person.
Other Facilitation Measures ( GST New Changes):
9. After evaluating the readiness of the trade, industry and government departments, it is decided that operationalization & registration of TDS/TCS provisions are postponed until 31st March 2018.
10. GST council will introduce the e-way bill system in a staggered manner w.e.f. 1st January 2018 and will roll out nationwide w.e.f. 1st April 2018. This is to give trade and industry extra time for acclimatizing itself with the GST administration.
11. GST council has extended the last date for filing the return in Form GSTR-4 under the composite scheme. This date is extended to 15th November 2017 for the quarter July-September, 2017. They have also extended the last date for filing for an input service distributor. The last date for filing the return in Form GSTR-6 for July, August and September 2017, is 15th November 2017.
12. GST council is revising Invoice Rules to provide relief to certain classes of registered persons.
GST New Changes