CII has strongly welcomed the proactive measures taken by the GST Council in its 32nd meeting held on 10th January 2019. “The GST Council led by Mr Arun Jaitley, Minister of Finance and Corporate Affairs, has once again shown its complete commitment to ensuring a smooth and facilitative indirect tax regime in the country,” stated Mr Chandrajit Banerjee, Director General, CII.
CII noted that the GST Council, since the introduction of the GST in July 2017, has continuously moved towards a simpler tax system. It has steadily reduced the tax rates on many items, ensuring a movement towards a 3-slab GST structure with a standard rate, a higher demerit rate and a lower rate for items consumed by the poor.
The Council has further proactively addressed procedural matters, enabling smaller enterprises to file returns at intervals and extending the time for adjustment. It has also taken up issues of consistency to minimize disputes and litigation, stated the CII press release.
CII said that the Council’s decision to double the threshold limit for exemption from registration and payment of GST to Rs 40 lakh in the general category states brings huge relief to lakhs of small enterprises. These would no longer be liable to prepare returns and pay taxes from April 1, 2019, enabling them to conduct their business smoothly.
CII welcomed the extension of the composition scheme for services in particular. It stated that including suppliers of services and mixed suppliers under the composition scheme with a tax rate of 6% would greatly help small service providers and professionals earning less than Rs 50 lakhs per annum. It would lower costs for buyers of these services down the supply chain as well. CII had recommended including services enterprises under the Composition Scheme and thanks the GST Council for this decision.
Felicitating the GST Council for raising the turnover limit for the composition scheme from Rs 1 crore to Rs 1.5 crore, CII said that this would release numerous small enterprises from the procedural burden. Further, these enterprises can file returns annually, freeing them from the need to maintain documents on a quarterly basis.
A key decision of the GST Council was to set up a group of ministers to look at the possibility of introducing the composition scheme for the residential real estate sector. The residential sector has been impacted due to the divergence between GST on under-construction and finished houses as well as introduction of Real Estate Regulation Act (RERA) simultaneously. CII hopes that the committee would provide relief to the housing sector, particularly low-cost housing.
With such progressive decisions from the GST Council headed by the Finance Minister Mr Arun Jaitley, CII is confident that GST will emerge as a game-changer for the Indian economy and fulfill the promise of adding 1-1.5 percentage points to the GSP growth rate within the shortest period of time.
11 January 2019