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More than 3 months have passed since the government rolled out GST in India but its compliance has been a big headache for the taxpayers. To handle these challenges, the GST Council held its 22nd meeting at New Delhi on the 6th of October 2017. In the meeting, various decisions and changes pertaining to GST return filing, composition scheme and GST rates have been announced. The various measures announced in the 22nd GST Council will tremendously improve ease of compliance for SMEs. Here are the key takeaways from the 22nd GST Council Meeting.
Easier GST Return Filing for SMEs
- Small and medium enterprises (SMEs) with an annual aggregate turnover of less than Rs.1.5 crores will no longer be required to file GSTR 1, GSTR 2 and GSTR 3 return every month.
- Instead, SMEs will be allowed to file quarterly GST returns and make quarterly GST payments, whether or not enrolled under the GST composition scheme.
- SMEs will be allowed to file quarterly GST returns starting from the October – December 2017 quarter.
- For now, all regular taxpayers will be required to file monthly GSTR 1, GSTR 2, GSTR 3 and GSTR 3B return for the months of July, August and September 2017. The due date for July 2017 GSTR 1 return, GSTR 2 return and GSTR 3 return has been announced. The due dates for August and September GSTR 1, GSTR 2 and GSTR 3 returns will be announced shortly.
- GST registration was earlier mandatorily required for any person who undertook inter-state (selling goods or services from one state to another state) irrespective of aggregate annual turnover.
- In the 22nd GST Council, it has been decided to exempt service providers from this criteria.
- Hence, service providers will now be allowed to undertake inter-state sales of up to Rs.20 lakhs without obtaining GST registration.
Reverse Charge Mechanism Suspended
- The 22nd GST Council has decided to suspend the GST reverse charge mechanism.
- Since registered taxpayers were required to pay GST on reverse charge basis when they purchased from an unregistered person (Most times a micro or small business), many registered businesses stopped transacting with micro and small businesses.
- Hence, the GST Council has decided to suspend the reverse charge mechanism. Now, registered taxpayers can purchase from unregistered persons without having to pay GST on reverse charge basis. This measure will provide a major boost to micro, small and medium businesses.
GST on Advances Received Not Required for SMEs
- As per the decision of 22nd GST Council, it has now been decided that taxpayers having annual aggregate turnover up to Rs. 1.5 crores will not be required to pay GST at the time of receipt of advances on account of supply of goods.
- The GST on such advance received will be payable only when the supply of goods is made.
Transportation of Goods by GTA
- Goods Transport Agency were not extending services to unregistered persons and were in many cases requesting GSTIN for transporting goods.
- The GST Council in the 22nd meeting has clarified that GTAs will not need any GSTIN for providing transportation services, thereby removing the hardship faced by SMEs.
GST Composition Scheme Eligibility Threshold Increased
- The 22nd GST Council has decided to form a Group of Ministers (GoM) to examine measures to make the composition scheme more attractive for SMEs.
- The 22nd GST Council has decided to increase the aggregate turnover to Rs.1 crore.
- The aggregate turnover threshold for special category States, except Jammu & Kashmir and Uttarakhand, has also been increased to Rs. 75 lacs from Rs. 50 lacs.
- The turnover threshold for Jammu & Kashmir and Uttarakhand has been fixed at Rs. 1 crore.
Due Date for Enrolling under GST Composition Scheme Extended
- The due date for enrolling under the increased threshold has been made available to both migrated and new taxpayers up to 31.03.2018.
- Also, once a business has enrolled under the Composition Scheme, the scheme will become operational from the 1st date of the succeeding date.
First GSTR 4 Return Filing Due Date Extended
- The due date for filing GSTR 4 return for July to September 2017 by taxpayers registered under composition scheme has been extended to 15.11.2017.
- Also, entities opting for composition scheme will have to now file GSTR 4 return only for that portion of the quarter from when the scheme becomes operational and can file returns as a normal taxpayer for the preceding tax period.
Implementation of TDS and TCS Provisions Delayed
- To help the taxpayer ecosystem gradually absorb the changes in the indirect tax regime, the Government has decided to postpone the TDS/TCS implementation.
- Its registration and operationalisation will begin from 31st March 2018.
E-Way Bill Implementation Delayed
- The e-way bill rules were earlier supposed to be implemented before December 2017.
- The GST Council has now decided to postpone the implementation of e-way bill provisions and rules to 1st January 2018.
- Hence, w-way bill rules will be operationalised in a staggered manner across India from 1st January 2018 to 1st April 2018.
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