The Council chose to continue with two pre-GST era schemes that allow duty-free sourcing of materials for export production till March 2018, a move that will improve the liquidity of exporters by preventing their working capital from getting locked up in tax procedures.
Man-made yarn to be now taxed at 12%, it was earlier at 18%.
He congratulated Finance Minister Arun Jaitley and his team for engaging with various stakeholders for "extensive feedback which led to today's recommendations" on GST (Goods and Services Tax).
Exporters will be given eWallets from April 2018, using which, they can directly maintain their payment of GST and claim their refunds. And on the basis of this credit, firms can pay IGST and GST. He said in Patna yesterday that under the current tax regime all tax-payers have to file monthly return, which is causing a lot of difficulty to small traders.
According to the previous GST rates, spark-ignition reciprocating or rotary internal combustion piston engine, compression-ignition internal combustion piston engines (semi-diesel or diesel engines) and pumps for dispensing fuel or lubricants were under 28 per cent.
In a move aimed at providing relief to traders and exporters; bringing simplicity and cutting compliance costs, the GST Council also made a decision to raise the turnover threshold to Rs 1 crore from Rs 75 lakh for businesses to avail of the composition scheme that allows them to pay 1-5 per cent tax without going through tedious formalities.
GST has been abolished on import of a number of goods, including rigs for oil and gas exploration and medicines supplied free by global agencies and bonafide gifts up to Rs 5,000.
- Paper waste from 12% to 5%.
- Many stones used in flooring, except marble and granite - will be now taxed at 18% instead of 28%.
By April 2018, e-wallets will be functional and the compliance burden would be relaxed for the small and medium businesses.
Those in the business of trading with revenue of up to Rs 1 crore a year will pay a flat tax of 1%; manufacturers will pay 2%; while restaurants will pay 5%, Arun Jaitley said.
So it was decided that both Centre and State officials will be empowered to start processing refunds and give exporters cheques. "We are relaxing their compliance burden", said Jaitley. These collections will not be the complete picture as these two months were early transitional phase.