New Delhi: India Inc on Sunday welcomed the GST Council's decision to cut rates on several items and simplification of tax return filing process for businesses, saying the move will boost compliance and benefit consumers.
In his first GST Council meeting since he took charge as the finance minister in May this year, Piyush Goyal allowed businesses with a turnover of up to Rs 5 crore to file quarterly returns -- a move which will benefit 93 percent of the GST registered taxpayers. They will have to, however, pay taxes monthly.
So far, businesses with a turnover of up to Rs 1.5 crore were permitted to file returns quarterly.
In a statement, the Confederation of All India Traders (CAIT) said the single page return form to be filed quarterly for traders having turnover up to Rs 5 crore is a bold step which will ease miseries of traders.
"The decisions relating to simplification of returns and especially keeping the interests of small taxpayers are noteworthy. This would facilitate ease of doing business both for small and large taxpayers," FICCI President Rashesh Shah said.
He further said that the decisions would increase compliance, widen the tax base and are in the right direction to achieve the objectives of GST.
In its meeting on Saturday, the GST Council also cut tax rates on 88 items, including footwear, refrigerator, washing machine and small screen TV, while the widely demanded sanitary napkins have been exempted from the levy.
"Exemption of GST on Sanitary napkins is welcome as it is a great step towards empowering women as sanitary napkins are necessary for female hygiene. This is a big step towards encouraging menstrual hygiene among young girls and women as scrapping of GST from Sanitary napkins will make napkins more affordable and more women will be able to use them," Pinky Reddy, President, Ficci Ladies Organisation (FLO) said.
Harpreet Singh, Partner – Indirect Tax, KPMG in India said that rate rationalisation on so many products is nothing short of being akin to the annual budget announcements.
"While rate rationalisation would definitely bring cheer for the industry and consumers, what would be interesting to see is how the government would try and compensate the revenue loss on account of tax rate reductions," Singh said.
He said rate cuts on handicrafts items such as deities made of stone, marble and woods, phool jharoo, Rakhis etc. was a long pending demand of the sector.
"Imposition of rate of 5/12 percent, added to the woes of sector which is already dwindling. Exemption from GST may provide much needed impetus to the industry which is a key contributor to rural employment," Singh said.
Quarterly returns for taxpayers with turnover of up to Rs 5 crore, which comprise of 93 percent of taxpayers, would definitely reduce the compliance burden of small dealers and assist them in channelising their energy in doing business rather than worrying about monthly tax filings, he added.
Consumer appliance maker Usha International CEO Dinesh Chhabra appreciated reduction in the GST rates from 28 to 18 percent on food grinders, mixers, storage water heaters, water coolers, water heaters, electric ironing machines, among others.
"These are basic appliances and are required in every household on a daily basis. This move ahead of the festive season will certainly bring cheer to consumers and lead to a spur in the growth of the appliances category," Chhabra said.
Ernst & Young Services India tax Partner Abhishek Jain said that the 28th GST Council meeting was positive with some very significant rate rationalisations.
"Big relief for hotels as GST rate of 28 percent would not apply if the actual tariff value is less than 7,500 even though the published tariff may be more than 7,500; this will also ease the IT systems for hotel players.
"Reduction in GST rate of ethanol for use by oil companies to 5 percent is again welcome as major petroleum products are outside GST and this would help reduce their cost," Jain said.
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Updated Date: Jul 23, 2018 07:54:35 IST