GST Council on Friday came up with a series of changes in rules in an attempt to offer relief to SMEs and exporters from the hardships of abiding by the newly launched indirect tax regime of the country.
Finance Minister Arun Jaitley said that the Council has decided to lower the taxes on 27 products and few services. In addition to this, a panel of state ministers has been asked to examine if at all the tax of 18 percent on air-conditioned restaurants could be reduced.
The Council, chaired by the Mr. Jaitley, has chosen to continue with two schemes which were prevalent in the pre-GST era. These schemes permit duty-free sourcing of materials for export production till the month of March of next year. This step will assist in enhancing the liquidity of exporters by stopping their working getting from getting locked up in the procedures of taxes.
The decision taken on Friday will be imposed over the period of the next one week. Additionally, a system of instant refunds is being created. An IT firm would be hired by the government in order to launch an e-wallet scheme by April 2018 with notional tax credits which can be used by exporters to buy goods without really incurring a burden.
President of the Federation of Indian Export Organizations Ganesh Kumar Gupta stated that the introduction of an e-wallet will offer a permanent resolution to the problem of liquidity faced by the exporters. “The early refund of GST for July and August will address the immediate liquidity concerns of exporters,” he added.
In an attempt to maintain the competitiveness of the national industry, exporters have been exempted from taxes. “Big players pay the largest chunk of GST, while small taxpayers who pay nominal or nil tax face high compliance impact. We are relaxing their compliance burden,” said Mr. Jaitley.
The Council has also decided to reduce the taxes on few services including job works (work that is given to small units by the manufacturers) in certain sectors to 5 percent from the prevalent rate of 12 percent.