Now to appease traders, BJP reduces compliance burden
New Delhi: To make the lives of traders easier, the GST Council, on Thursday has announced to increase the registration limit of small trades from 20 lakh to an annual turnover of Rs.40 lakh.
After this move it seems like BJP government is leaving no stone unturned to appease its diverse potential voters by installing provisions like 10% quota for poor of general category, now the government is directed towards persuading small traders.
The benevolent GST Council has also made provisions for service providers such as beauty parlors, automobile service centers and others that will not be subjected to file detailed returns and will be able to pay taxes at a flat rate of 6%.
Similarly, limit for the composition scheme has been increased from 1 crore to 1.5 crore. By these measures the government is supposed to win the favor of traders who were constantly nagging the government for high compliance burden.
This move also include manufacturing units,garment stores and confectioneries, and aims at making the lives of traders simple.
Finance Minister Arun Jaitley said that this move is directed towards assisting micro, small and medium enterprises by offering them a number of options.
However, the decision faced opposition from some Congress ruled states like Puducherry and Chhattisgarh.
Previous month, the Council had reduced taxes on certain commodities as a sign of tax relaxation to benefit consumers. This latest drive of the government is seen as a political lollipop that has been offered to public to ensure its win in the upcoming elections.
The composition scheme comprises of a flat tax of 1% of turnover and the traders will have to file only an annual return, though they will have to deposit tax at every quarter. However, the traders who avail this facility will not be permitted to claim input tax credit.
Council to decide on real estate and lottery
Two ministerial panels will decide over the taxation policy on lotteries and will also suggest a policy to levy taxes on under- construction property. The Council has decided to make a distinction between goods manufacturers and sellers and service providers to make the tax slab uniform and hassle free. This decision will enable states and union territories to set their own limits for goods. The decision has not been welcomed by tax practitioners who believe that different limits for different states will complicate the GST slab.
Deloitte India consulting partner M.S Mani said that this will bring back the VAT period and it would have been better to keep same limit for all goods and services as this step will complicate the taxation policy.