NEW DELHI-India eased rules for small businesses and exporters under its new tax system, the goods-and-services tax, amid growing criticism that poor implementation is hurting business in the South Asian economy. Businesses with annual turnover of up to Rs 1.5 crore, which constitute 90 per cent of the taxpayer base but pay only 5-6 per cent of total tax, have been allowed to file quarterly income returns and pay tax instead of the current provision of monthly filings. He also said duties would be cut on some products and the threshold for lower tax would be raised. Further, the government has also made a decision to exempt exporters from IGST for next six months, Thomas Isaac said on the sidelines of the crucial GST Council meeting underway in New Delhi.
The Council had in its previous meeting also chose to set up two committees to look into the problems being faced by exporters and the technical glitches in the GST IT network. Small scale enterprises and exports were two major concerns among them.
"For small and medium taxpayers, the tax burden is less but compliance is more".
This could be altered to a quarterly exercise for businesses with a turnover of up to Rs 1.5 crore. Changes to this effect would ensure that exporters get their working capital locked up in refunds released quickly. At present, the sector is burdened with astronomical debt of almost Rs 8 lakh crore by some estimates due to a slew of freebies which are being doled out by incumbent telecom players to retain their customer base. "Today's recommendations will immensely help small and medium business", the prime minister said in a tweet.
There is a lot of confusion regarding The Goods and Services Tax (GST) in the market.
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The Council has chose to reduce the rates on several items, including sliced dried mangos, khakhra and plain chappatis, unbranded namkeen, unbranded ayurvedic medicines, plastic, rubber and paper waste, yarn, diesel engine parts, pump parts, e-waste, and several services.
He said that there were representations on issues related to MSMEs & exporters with respect to the GST.
"The collection pattern observed so far shows that a substantial portion of the tax is coming from the big players", Mr Jaitley said.
Indian exporters were facing liquidity issues, Jaitley said, noting the government would start refunding exporters for July and August from October 10.