Recommendations made by the GST Council in its 22nd Meeting held on 06th October, 2017

Circular No.ES/173/2017-18 October 09, 2017

To: Members of the Council

Sub: Recommendations made by the GST Council in its 22nd Meeting held on 06^th October, 2017

Dear Member,

The Council is glad to inform you that in the 22^nd Meeting of the GST Council held on 6^th October, 2017 under the Chairmanship of the Union Minister of Finance and Corporate Affairs, Shri Arun Jaitley to recommend the following facilitative changes to ease the burden of compliance on small and medium businesses.

Composition Scheme

Increase in the turnover threshold

The composition scheme shall be made available to taxpayers having annual aggregate turnover of up to Rs. 1 crore as compared to the current turnover threshold of Rs. 75 lacs.
This threshold of turnover for special category States, except Jammu & Kashmir and Uttarakhand, shall be increased to Rs. 75 lacs from Rs. 50 lacs.
The turnover threshold for Jammu & Kashmir and Uttarakhand shall be Rs. 1 crore.
The facility of availing composition under the increased threshold shall be available to both migrated and new taxpayers up to 31.03.2018.
The option once exercised shall become operational from the first day of the month immediately succeeding the month in which the option to avail the composition scheme is exercised.
New entrants to this scheme shall have to file the return in FORM GSTR-4 only for that portion of the quarter from when the scheme becomes operational and shall file returns as a normal taxpayer for the preceding tax period.
The increase in the turnover threshold will make it possible for greater number of taxpayers to avail the benefit of easier compliance under the composition scheme and is expected to greatly benefit the MSME sector.

Eligibility for the composition scheme

Persons who are otherwise eligible for composition scheme but are providing any exempt service (such as extending deposits to banks for which interest is being received) were being considered ineligible for the said scheme.
It has been decided that such persons who are otherwise eligible for availing the composition scheme and are providing any exempt service, shall be eligible for the composition scheme.

Group of Ministers set up to make GST composition scheme more attractive

A Group of Ministers (GoM) shall be constituted to examine measures to make the composition scheme more attractive.

Relief for Small and Medium Enterprises

a. Presently, anyone making inter-state taxable supplies, except inter-State job worker, is
compulsorily required to register, irrespective of turnover.
1. Now, it has been decided to exempt those service providers whose annual aggregate turnover is less than Rs. 20 lacs (Rs. 10 lacs in special category states except J & K) from obtaining registration even if they are making inter-State taxable supplies of services. This measure is expected to significantly reduce the compliance cost of small service providers.

a. To facilitate the ease of payment and return filing for small and medium businesses with
annual aggregate turnover up to Rs. 1.5 crores, the GST Council has decided that such taxpayers shall be required to file quarterly returns in FORM GSTR-1,2 & 3 and pay taxes only on a quarterly basis, starting from the Third Quarter of Financial Year (October-December, 2017).
1. The Registered buyers from such small taxpayers would be eligible to avail Input Tax Credit (ITC) on a monthly basis.
2. The due dates for filing the quarterly returns for such taxpayers shall be announced in due course.
3. Meanwhile, all taxpayers will be required to file FORM GSTR-3B on a monthly basis till December, 2017.
4. All taxpayers are also required to file FORM GSTR-1, 2 & 3 for the months of July, August and September, 2017.
5. Due dates for filing the returns for the month of July, 2017 have already been announced.
6. The due dates for the months of August and September, 2017 will be announced in due course.
a. The reverse charge mechanism under section 9 of the CGST Act, 2017 and section 5 of the IGST Act, 2017 shall be suspended till 31.03.2018 and will be reviewed by a committee of experts.
1. This will benefit small businesses and greatly reduce compliance costs.
a. The requirement to pay GST on advances received is also proving to be burdensome for small dealers and manufacturers. In order to mitigate their inconvenience on this account, it has been decided that, taxpayers having annual aggregate turnover up to Rs.1.5 crores shall not be required to pay GST at the time of receipt of advances on account of supply of goods is made.
b. The GST on such supplies shall be payable only when the supply of goods is made.

Since Goods Transport Agencies (GTAs) are not willing to provide services to unregistered persons, the GST Council has decided to exempt the services provided by a GTA to an unregistered person from GST.

Other Facilitation Measures

It has been decided that registration and operationalization of TDS/TCS provisions shall be postponed till 31.03.2018.

In order to give members of Trade more time to adjust itself with the GST regime, the GST Council has decided to introduce the e-way bill system in a staggered manner w.e.f. 01.01.2018 and it shall be rolled out nationwide with effect from 01.04.2018.

      3.  The last date for filing the return in FORM GSTR-4 by a taxpayer under composition scheme for the
           quarter July-September, 2017 and for filing the return in FORM GSTR-6 by an input service distributor for
           the months of July, August and September, 2017 shall be extended to 15.11.2017.