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Saturday, August 4, 2018

Goods ad Services Tax(GST) - A withdrawal or exemption of CGST may, however, be seen as going back on the basic GST premise of taxing goods and services equally by both the central and state governments. Other proposals before the Council include giving registration relief to small businesses with less than ₹20 lakh sales, which are required to take GST registration because they make inter-state sales either by themselves or through e-commerce platforms. The GST Council at its last meeting in July decided to let firms with up to ₹5 crore in annual sales file tax returns quarterly, rather than monthly, while continuing to pay taxes every month.

Small businesses, with annual sales of as much as ₹ 1.5 crore, may not need to pay central goods and services tax (CGST), or may get a refund of the same, if the GST Council clears the proposal at its meeting on Saturday Aug 04,2018

Under the indirect tax system that prevailed before GST, the central government taxed goods at the factory gate (called excise duty), while the states levied value-added tax (VAT). GST replaced both, with a central GST that goes to the central government and a state GST that goes to state coffers. Businesses with revenue of up to ₹1.5 crore did not have to pay excise duty under the previous regime, and a waiver or exemption on CGST now will restore the relief that was available to them earlier.

The state GST (SGST) that these entities pay will, however, remain as they were not exempt from VAT either. Hence, they will have to retain their GST registration, the person mentioned earlier said on condition of anonymity.

The CGST exemption will be a major relief for small firms that form the backbone of the rural economy and create jobs for millions of people. These entities had faced a liquidity crunch and business disruption following the withdrawal of high-value currency notes in November 2016. The central government hopes the tax relief, along with the recent tax cut on consumer items such as washing machines and air conditioners, will stimulate demand and boost economic growth and revenue receipts

A withdrawal or exemption of CGST may, however, be seen as going back on the basic GST premise of taxing goods and services equally by both the central and state governments.

Other proposals before the Council include giving registration relief to small businesses with less than ₹20 lakh sales, which are required to take GST registration because they make inter-state sales either by themselves or through e-commerce platforms.

The GST Council at its last meeting in July 2018 decided to let firms with up to ₹5 crore in annual sales file tax returns quarterly, rather than monthly, while continuing to pay taxes every month.

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