Maharashtra brings in 31 GST reforms to promote ease of doing biz

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Following the GST Council’s meeting last week, the state government brought in 31 reforms in the state GST structure to promote ease of doing business on October 3, a state finance ministry official said. The state government has brought in changes for the first time since the introduction of the goods and services tax (GST), and all the changes will come into effect from October 1, the official said. The state had slipped to the 13th rank in the Centre’s rankings released by the Department of Industrial Policy and Promotion in July. It had ranked 10th in the previous year.

 The official said hotels, restaurants and traders will now see speedy processing of refunds, as actual processing would start from the date of its filing, rather than March 31 of every fiscal earlier. “There are sizeable number of traders who file their tax on a monthly or quarterly basis. The process of refunds as per the existing rules begins from March 31 and the period for refunds stretches to two years,” the official said. “The GST council has decided to initiate the refund processing from the date of filing of tax returns. It will save the waiting period of the traders for their refunds,” the official claimed. The companies having their units in special economic zones (SEZs) as well as outside them used to have only one GST number earlier. However, the official said, “The companies in SEZ can now have separate GST registration numbers, which will be simply for the processing of taxes for the authorities as well as for the filing companies,” the official said.

The recovery of evaded tax is another front where the reforms have given more muscles to the authorities. The challenge was to recover tax dues from a company having presence in multiple states. Existing state GST structure prohibited the tax recovery from units present in other states, which is now changed and authorities can recover the taxes, the official said. Another major step in the GST reforms is to charge 2 percent TDS (tax deducted at source) on payments made to all types of government contractors. The cumulative GST on such payments is 9 percent, the official said. “This will help the state government to streamline financing to the projects as well as earn certain amount at regular intervals apart from the collection of taxes from other sources,” the official added.

The rule of one GST number for one trader irrespective of his or her multiple business activities is now changed. A trader can have multiple GST numbers as per the business verticals, according to the official. Hotel, restaurant and grocery shop owners can now enjoy ‘composition scheme’, where annual turnover bar is raised from Rs 1 crore to Rs 1.5 crore. It is revised to bring it parallel to income-tax provision, where annual revenue above Rs 1.5 crore invites tax audit provision as per the I-T rules, the official said. “Earlier, companies having service tax could not avail ‘composition scheme’, but if the component of service tax is up to 10 percent or more than Rs 5 lakh, then those units can benefit from the scheme,” the official said. The tax consultants who were restricted to filing of returns can now extend their services to deregistration under GST and refund filing as well, the official added.

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