The Centre and states decided to lower rates on 66 goods and services — from pickles and cheaper cinema tickets to insulin and instant food mixes — and also eased the compliance burden for small businesses as they raced to be ready to launch the goods and services tax from July 1. The GST Council reduced the rates for nearly half the 133 items on which representations had been received, which included hybrid cars, sanitary napkins, telephone bills and ships manufactured in the country.The objective (of earlier rates) was to maintain equivalence to the existing taxes, and in some other cases the fitment had breached this equivalence principle. In others, the reduction is required because of the changing nature of the economy and changes that have occurred in consumer preference. Apart from the changes in rates, the GST Council also reworked the composition scheme for small businesses by allowing those with an annual turnover of Rs.75 lakh, instead of Rs.50 lakh earlier, to avoid any compliance burden and simply pay tax. Small traders within the prescribed turnover will be able to opt for the scheme by paying 1% tax while manufacturers are allowed to pay 2% and restaurants 5%. Those opting for the composition scheme do not need to file invoices electronically or complete the three-stage filing process every month. They are, however, ineligible to claim input tax credit. The outcome of this meeting of the GST Council is likely to have a positive impact on various sectors like textiles, education, entertainment etc. as their concerns on rates have been heard and addressed by the GST Council.

(Times of India)