When the government cut Goods and Services Tax (GST) rates on 27 items and 12 services on October 6, it was seen as a measure easing the burden on small businesses and consumers who are reeling under inflationary pressure. While it soothed the nerves of many, some experts feel that the GST Council needs to address technical issues at the earliest to ease the problems of those battling with procedural difficulties.
“The government is taking an effort to make things work and that is good. We welcome these steps. But the primary problem is with uploading the GST. Complicated data that involves large quantity of invoices are more complex in filing. Application service providers are finding it difficult to cope up with the GSTN portal. Hence these things should be addressed in the council meeting,” said Dhairyashil H. Patil, national president of All India Consumers Products Distributors Federation.
Apart from slashing GST rates on items like dried mango slice, khakra, stationary, namkeens and man-made yarn, the government also made the composition scheme available to taxpayers with turnover of up to Rs 1 crore as compared to the current turnover threshold of Rs 75 lakhs. The increase in the turnover threshold will help greater number of taxpayers in the MSME sector avail benefit of easier compliance.
For exporters, the government announced early refund that started from October 10 for the month of July and on October 18 for August. It also announced that from now, refund will be granted immediately after filing the return to the exporters. A new electronic system of e-wallet has been created for the exporters that will be implemented from April 2018.
A panel of group of ministers will also be formed to discuss issues related to reducing GST on restaurants and exempting zero rated goods in calculation of turnover.
Finance minister Arun Jaitley hailed the new tax regime and said a total of 72 lakh taxpayers have migrated from the old regime and 26 lakh new taxpayers have registered under GST. About 95% of the revenue is collected only from large assessees, he said.
“Things are improving and going the right way. But the government needs to understand that while 95% of the tax are coming from large assesses, about 70% of assesses are small traders, masses who are coming in direct contact with the government taxation system for the first time. Their problems need to be addressed as well,” said D. Patil.
While the measures announced on October 6 are likely to bring some relief to consumers at a time when the inflationary pressure is high, long-term impact of the GST on the economy will only be felt when these concerns are addressed by the council. The next meeting of the GST Council is slated to be held on November 9 and 10 in Guwahati.