GST Council may cut taxes on January 10

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To provide relief to small and medium businesses, the Goods and Services Tax (GST) Council will next week decide on easing tax compliance burden, reducing tax rate on under-construction flats, and bringing small service suppliers under composition scheme. The Council headed by finance minister Arun Jaitley is set to meet on January 10. After a rate rationalisation on 23 items including TVs and movie tickets in the previous meeting of the Council held last month, all eyes are another round of rate cuts ahead of the general elections. The GST on under-construction flats and houses is likely to be reduced to 5% from a current 12%.

“This will benefit also consumers of the residential properties.  There were complaints about the builders not passing the GST benefit of the input tax credit (ITC) to the homebuyers. As a result, the under-construction properties were not attracting customers as they became costlier as compared to finished ones which don’t attract GST,”said a government official. There is also a demand from the construction industry to bring down the tax rate of cement from 28% to 18%. “Another proposal is on increasing the threshold for the mandatory GST registration for the businesses with an annual turnover of Rs 20 lakh to Rs 75 lakh,” said a finance ministry official. Currently, the businesses with a turnover of less than Rs 20 lakh are not required to pay out the GST. This move is likely to majorly benefit the small and medium businesses.

The Council will also deliberate on a proposal to bring small service suppliers under the composition scheme. The composition scheme allows small businesses to pay tax at a lower rate compared to the rest of the businesses. “The threshold for availing of the scheme may be fixed at the annual turnover of Rs 50 lakh or Rs 1 crore for the suppliers of services,” the official said. Currently, the suppliers of services can’t avail the composition scheme. Meanwhile, the Group of Ministers (GoM) headed by Sushil Modi will also present its report on the ‘natural calamities and disasters’ to the Council. The panel was asked to come up with a mechanism to help raise funds for the states devastated by natural disasters. The GoM was set up after Kerala oods in August last year. Several proposals, including levying a calamity, tax was under consideration to raise funds for natural disasters.

Read more at: https://www.dnaindia.com/business/report-gst-council-may-cut-taxes-on-january-10-2704036

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