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GST

It has been more than 4 months since GST was implemented. There have been multiple announcements and amendments since then, pertaining to the new tax regime.

A quick history of GST

2000
The Goods and Service Tax (GST) was first announced in 2000.

August 3, 2016
The GST bill was passed by Rajya Sabha and was introduced in the 122nd Amendment of the Constitution.

July 1, 2017
GST was implemented on July 1, 2017 and was categorised into five tax slabs -0%, 5%, 12%, 18% and 28%.
One Nation, One Tax: It unified a $2-trillion economy with 1.3 billion people, into a single market.

Related: Could GST make your dream home a reality?

October 6, 2017: 22nd GST Council meeting was held and the following changes were notified.

For small businesses:

  • With a turnover of within Rs 1.5 crores, small business were facing issues in filing compliance costs. Now taxes can be paid quarterly.
  • For three months – July, August, and September, taxes must be filed monthly, and then from October 1, 2017, filing can be done quarterly.

For Service providers:
If the aggregate turnover is less than Rs. 20 Lakhs (10 lakhs for Special category states) GST registration is exempted, even if supplying services to other states.
All provisions pertaining to TDS or TCS will be postponed till March 31, 2018.
Like small businesses, tax filing will be done quarterly, instead of monthly, except for three months- July, August, and September.

For exporters:
Refund cheques procedure has been postponed by few days as following

  • For July exports: October 10, 2017
  • For August exports: October 18, 2017

A nominal 0.1% GST will be paid by merchant exporters, to enable suppliers to claim ITC.

Related: How GST changes your everyday life

Changes in the Composition Scheme

  • The threshold limit has been changed to Rs. 75 lakhs, which comes as a relief for small businesses
  • A person providing any exempt services will not be eligible for the scheme
  • Any dealer with an aggregate turnover of upto Rs. 1 crore, is eligible to avail the composition scheme
  • GST rates for traders, manufacturers, and restaurants are 1%, 2%, and 5%, respectively
  • The last date of Form GSTR-4 for the quarter (July-September) has been extended to November 15, 2017

 

Other significant changes in GST rates

List of items reduced to 5% from the earlier 12%

  • Unbranded Ayurvedic medicines
  • Job work items
  • Khakra and unbranded namkeen
  • Zari work
  • Printing Job work

Tax on man-made yarn has been reduced to 12% from 18%, which will impact the textile industry. Meanwhile, the tax on stationery items and diesel engine parts has been reduced from 28% to 18%. There is 35% abatement on old leasing contract of vehicle

Related: How does GST impact your wallet?

What is the latest update on RCM?
Reverse Charge Mechanism (RCM) has been deferred till March 3, 2018. 
Usually, the supplier of the goods pays the tax. However, in RCM, if an unregistered GST vendor supplies goods to a registered GST person, the receiver becomes liable to pay the tax.
What is the change in advance receipts?
There is no GST on advance receipts for businesses with a turnover of less than Rs. 1.5 Crores.
Related: 5 Financial products and services that GST will affect
 

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