How will the 29th GST council meeting ease the tax burden on MSMEs?
The 28th GST council meeting that was held recently on 21st July 2018 had undoubtedly unveiled pro-consumer reforms by slashing the GST rates in over 452 items, out of which 384 were goods and 68 were services. Moreover, a large number of services were exempted from GST. the massive tax cuts have all the more provided much relief to the consumers in general.
As a step ahead towards equilibrating populism with prudence, the GST council in its 29th meeting which was scheduled to be held today at the Vigyan Bhawan, New Delhi, has extended tax reliefs to the MSME sector in India.
The 29th GST council meeting that was chaired by the Union Minister of Finance, Railways and Coal Sh. Piyush Goyal has brought about significant measures to alleviate the tax burden from the MSMEs whose turnover falls below â‚¹ 1.5 crores.
#1. Why has the GST council decided to introduce tax reliefs to the MSMEs?
To recall, the 28th GST council meeting had involved numerous deliberation for boosting of MSMEs in India and had brought forward innumerable reforms in this regard, including:
- Raising the Threshold limit for Monthly GST returns from â‚¹ 1.5 crores to â‚¹ 5 crores. This was done to enhance the ease of doing business for the MSMEs.
- Simplification of the GST return filing procedure and many more.
- The GST council has decided to introduce further tax-reliefs in its 29th meet today, as an adjunct to those relief measures that were discussed in the previous meeting.
#2. What are those tax reforms that will be introduced at the 29th GST meet?
The tax sops extended to the MSMEs will be in the form of the tax refunds to the tax assessees that have a turnover up to â‚¹1.5 crores.
However, the effective GST tariff may be slashed while the input credit chain will remain unchanged.
#3. How deliberate are these reforms that are introduced for MSMEs?
There is no doubt that the above-mentioned steps are sure to benefit the MSMEs in India as the GST council has done a rigorous survey of the MSMEs across India. In the recent days, the council had interacted with MSMEs across 12 major cities in India and address their key issues, so as to chalk out the apt solutions to them.
#4. What has the GST council done to boost digital transactions?
The GST council in its 29th meeting has sought to promote e-transactions in order to achieve the goal of digitalization of the economy. For this, the council has decided to allow a cash back @ 20% of total amount of GST, if payment is done via BHIM app, RuPay Debit card and UPI-based e-transactions, subject to the upper cap of â‚¹100/-.
Moreover, this will ensure more transparency and will boost the compliance rate.
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