GST changes: What it means for you

In yet another significant recast of the goods and services tax (GST) regime, the GST Council has cut rates on a number of goods in the 28 per cent slab, introduced easier filing and given relief to small businesses. ET takes a look:

Rate Rationalisation:

• 28 per cent slab largely confined to sin goods and luxuries
• More items exempt from tax
• Many items taxed at 5 per cent or 12 per cent rate

What it Means

• Bulk of the items in 12 per cent or 18 per cent slab
• This is effectively a two-rate structure and movement to one dominant rate of around 15 per cent may be possible once revenues pick up.

Return filing Changes:

• Taxpayers with turnover up to Rs 5 crore
• Returns to be filed every quarter through Sahaj and Sugam forms
• Tax has to be paid every month like every other assessee
• 93 per cent of taxpayers will fall in this category

Other taxpayers

• One-month returns to be filed
• Return will have two tables—outward supply and input credit claim
• Invoices can be updated continuously
• Automated process will reduce work as forms will get populated as invoices are uploaded

What it Means
Simpler process should reduce compliance costs and delays and, in the long run, bring down disputes

Clarification on Hotels:
GST to be charged on actual tariffs to customers and not printed rate

What it Means
Incidence on tax will decline as tax will be charged on actual rates
Impetus to tourism and room costs will decline

Reverse Obligation: Expectation from businesess:
The government has sacrifi ced yet more revenues through the latest round of cuts. It will expect something in return

Compliance
Govt expects better compliance with simpler filing
Businesses can expect more pressure from tax authorities if compliance doesn’t improve

Sharing of benefits
Govt will expect tax cuts to be shared with consumers
Anti-profiteering body could get more active if gains are retained