GST becomes simpler: these are the 27 items become cheaper

The GST Council on announced huge changes to the Goods and Services Tax Bill(GST) leading to major tax rate cut of various items. The move was aimed to provide support to exporters and small businesses.It’s almost three months since GST roll out. The GST Council announced six-month tax relief for exporters.

GST Council has agreed to allow SMEs with a turnover of up to Rs 1.5 crore to file quarterly returns instead of monthly filings. About 90% of the taxpayers will be benefited by this change.

To provide an easy format to pay GST, the government announced Composition Scheme for SMEs. Composition Scheme is a simple and easy scheme under GST for taxpayers. Small taxpayers can get rid of  GST formalities and pay GST at a fixed rate of turnover. This scheme can be opted by any taxpayer whose turnover is less than Rs. 75 lakh.The Council also decided to cut GST rate on 27 common use items.

Following is the list of 27 items that are set to become cheaper:-

Food items:

Mangoes sliced dried – GST rate cut from 12% to 5%

Khakra and plain chapati rate cut from 12% to 5%

Unbranded Namkeens will be taxed at 5% now from 12%

Unbranded Ayurvedic, Unani, Siddha, Homeopathy medicines – from 12 percent to 5 percent.

Stationery:

Poster Colour – from 28% to 18%

Modelling paste for children- from 28% to 18%

Plastic waste, parings or scrap – from 18% to 5%

Rubber waste, parings or scrap – from 18% to 5%

Hard Rubber waste or scrap – from 28% to 5%

Paper waste or scrap – from 12% to 5%

Textile:

All synthetic filament yarn, such as nylon, polyester, acrylic, etc. from 18% to 12%

All artificial filament yarn, such as viscose rayon, Cuprammonium – from 18% to 12%

Sewing thread of man-made staple fibers – from 18% to 12%

Yarn of man-made staple fibers – from 18% to 12%

Real Zari – from 12% to 5%

Cullet or other waste or scrap of Glass – from 18% to 5%

Fittings for loose-leaf binders or files, letter clips, letter corners, paper clips and others from 28% to 18%

Plain Shaft Bearings – from 28% to 18%

Parts suitable for use solely or principally with fixed Speed Diesel Engines of power not exceeding 15 HP – from 28% to 18%

E-Waste – from 28% to 5%

Biomass briquettes – from 18% to 5%

A substantial portion of the tax is coming from the large-scale businesses, while the small players have a low tax burden, they have a high compliance burden. So this decision to reduce this burden will be a console for them.

The GST Council has also set up a Group of Ministers to look into various issues including whether, when calculating the tax burden of a business, its total turnover should be considered.