GoM for 12% GST on AC eateries, composition scheme tax cut

Agencies
October 30, 2017

New Delhi, Oct 30: The ministerial panel working to make GST composition scheme more attractive today suggested slashing tax rate to 1 per cent for manufacturers and restaurants, while easier norms for traders opting for it.

Currently, manufacturers and restaurants with turnover up to Rs 1 crore pay GST under composition scheme at 2 per cent and 5 per cent respectively. The same for traders is 1 per cent.

In its second meeting, the Group of Ministers, headed by Assam Finance Minister Himanta Biswa Sarma, today also suggested doing away with the tax rate distinction between AC and non-AC restaurants, those which are not covered under composition scheme, and tax them at 12 per cent with input credit.

It also suggested that eating out at hotels, which has room tariff of more than Rs 7,500, should attract an uniform 18 per cent tax rate instead of any separate category for 5- star hotel.

The GST Council, chaired by Union Finance Minister Arun Jaitley and comprising his state counterparts, on November 10 in Guwahati is likely to take up the recommendations of the GoM, which was set up earlier this month.

With regard to traders, the GoM suggested two prongedapproach for taxation under the composition scheme.

It suggested that traders who want to exclude the sale proceeds of tax-free items from its turnover, it can pay 1 per cent GST (Goods and Services Tax). However, those traders who pay tax on total turnover, the tax rate has been proposed at 0.5 per cent.

For example, supposing a trader deals in goods which are tax exempt as well as those which are taxable under the GST and has a turnover of Rs 1 crore. Of this, Rs 40 lakh turnover is from sale of tax-exempt items and remaining Rs 60 lakh from taxable goods.

So, traders deciding to pay tax on total Rs 1 crore turnover can pay 0.5 per cent, while those wanting to pay tax on Rs 60 lakh can cough up 1 per cent GST.

"The GoM decided that tax rates under composition scheme for restaurants and manufacturers be lowered to 1 per cent. For traders the ministerial group suggested two tax rates," an official told PTI.

The GoM also recommended allowing businesses who are engaged in inter-state sale to avail the composition scheme, he added.

Around 15 lakh businesses opted for composition scheme, which allows them to pay taxes at a concessional rate and makes compliance easy under the Goods and Services Tax (GST) which rolled out from July 1. There are over 1 crore businesses registered under GST.

Composition scheme is open for manufacturers, restaurants and traders whose turnover does not exceed Rs 1 crore. This threshold was earlier Rs 75 lakh and the GST Council earlier this month raised it to Rs 1 crore from October 1.

While a regular taxpayer has to pay taxes on a monthly basis, a composition supplier is required to file only one return and pay taxes on a quarterly basis.

Also, a composition taxpayer is not required to keep detailed records that a normal taxpayer is supposed to maintain.

The GoM was tasked with revisiting the tax structure of different categories of restaurants with the aim of rationalising or reducing the rates, apart from making composition scheme more attractive for businesses.

Currently, GST is levied at 12 per cent on non-AC restaurants, while it is 18 per cent for air-conditioned ones.

The other members of the GoM are Bihar Deputy Chief Minister Sushil Modi, Jammu and Kashmir Finance Minister Haseeb Drabu, Punjab Finance Minister Manpreet Singh Badal and Chhattisgarh Minister of Commercial Taxes Amar Agrawal.

The GoM has also suggested that manufacturers engaged in job works can be allowed to opt for composition scheme, the official added.

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News Network
April 25,2020

Chennai, Apr 25: Civic authorities on Saturday turned down a plea for exhuming the body of a doctor who died of COVID-19 here and burying it in another cemetery, citing health experts' view that it was unsafe to do so. Citing a request from the wife of the deceased doctor to allow exhumation and then re-burial at a cemetery in Kilpauk, the Greater Chennai Corporation said it sought a report from a committee of public health experts to ascertain the feasibility of entertaining her plea.

The spouse of the doctor had appealed to the GCC on April 22 to exhume and bury again her husband's body. She had said that burial in the Kilpauk cemetery here was her husband's last wish and he had conveyed it to her before he was put on a ventilator.

The report of experts has said that "it is not safe" to exhume and again bury the body of a COVID-19 victim and hence "it is not possible to accept her request," the GCC said in an official release. On April 19, a city-based 55-year-old neurosurgeon died of coronavirus and his burial at the Velangadu crematorium here was marred by violence.

A mob which falsely feared that the burial may lead to the spread of contagion had attacked the corporation health employees and associates of the deceased doctor. The doctor's wife and son also had to leave the burial ground in view of the violence.

The body was brought to Velangadu as people of Kilpauk area had opposed his burial there. Over a dozen men involved allegedly in violence were arrested and remanded to judicial custody. Later, in a video message, the surgeon's wife had said that it was her husband's last wish to be interred at the Kilpauk cemetery as per Christian rituals

Chief Minister K Palaniswami and DMK president M K Stalin had spoken to her on Wednesday over the phone and condoled her husband's death.

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News Network
January 27,2020

Jan 27: Bollywood Film Director Anurag Kashyap, who has been vocal about his political views on social media, slammed Union Minister Amit Shah and accused him of being 'cheap'.

"How timid our Home Minister is. Its own police, its own goons, its own army and security increases and invades unarmed protestors. Amit Shah has crossed the extent of cheapness and inferiority. History will spit on this animal," Kashyap tweeted.

The film director has taken an active part in the anti-Citizenship Act protest rallies and was against the Jawaharlal Nehru violence. He also came in support of his contemporary Deepika Padukone when the latter faced backlash for showing up at JNU in support of the students.

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News Network
July 20,2020

New Delhi, July 20: India's retail trade has suffered a business loss of about Rs 15.5 lakh crore in past 100 days due to the COVID-19 lockdown, traders' body CAIT said on Sunday. 

In a statement, the Confederation of All India Traders (CAIT) said traders across the country are depressed because of minimal of the consumers, considerable absence of employees, facing financial crunch and yet have to meet several financial obligations.

"No support policy from the central or state governments is yet another crucial factor which is haunting the traders," CAIT claimed. 

CAIT Secretary General Praveen Khandelwal said the domestic trade is passing through its worst period in the current century which reflects that if immediate steps are not taken about 20 per cent of the shops in India will have to close down their shutters.

The traders’ body has also urged the government to award a substantial package to traders to ensure their survival. Their demands include: Relaxation in payment of taxes, extension in repayment of bank loans and EMIs without any further interest or penalty as well as measures that would provide money directly in the hands of the traders.

In April, the losses stood at about Rs. 5 lakh crore whereas in May it was estimated to be about Rs. 4.5 lakh crore, followed by Rs. 4 lakh crore in June. Losses stood at about 2.5 lakh crore in the first fortnight of July offering a grim snapshot of the effect of the pandemic on consumer spending. 

“Even as the lockdown was relaxed, store footfall was only 10 per cent. Most of these traders do not have deep pockets to sustain this severe economic catastrophe and on the other hand have several financial obligations to meet. At this crucial time, handholding of these traders is all the more much required,” Khandelwal said.

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