Small traders set to get fresh GST relief

Panel wants increase in composition scheme threshold to ~1.5 cr ore; reduction in rate and allowing interstate supply

Ahigh-level panel on the goods and services tax (GST) in its meeting on Sunday recommended major changes in the new indirect tax system that may ease the compliance burden for all assessees and make the composition scheme more attractive.

It also proposed further easing the burden for restaurant owners.

The group of state finance ministers (GoM), led by Assam Finance Minister Himanta Biswa Sarma, recommended that all GST payers be allowed to file quarterly returns, even as those with an annual turnover of above ~1.5 crore had to pay the tax every month, sources said.

The GST Council in its previous meeting had decided to allow taxpayers with a turnover of up to ~1.5 lakh to file quarterly tax payment and return filing.

Additionally, the panel suggested a reduction in late filing fees to ~50 per day, against ~200 at present.

In a mega relief for small and medium enterprises, the panel recommended an overhaul of the composition scheme in the form of reducing rates, hiking the eligibility threshold to ~1.5 crore, from ~1 crore, and allowing interstate supply.

It also proposed reducing rates to a flat one per cent for manufacturers and restaurants, against the current rates of two per cent and five per cent, respectively.

For traders, it recommended a lower rate of 0.5 per cent in the case of a cumulative turnover of exempted and non-exempted goods, and one per cent for non-exempted goods.

The composition scheme, which offers easier compliance, has received a lukewarm response, prompting the GST Council to give it a relook.

“We have decided on a slew of measures to make the composition scheme attractive. It will be taken before the Council for a final decision,” said Sarma, after the meeting in New Delhi.