The biggest tax reform since Independence, GST will subsume over a dozen of state and central taxes.
Highlights
- In its video, government highlights simple and easy switch-over to GST
- The clip comes amid apprehensions that GST transition will be complicated
- GST will subsume over a dozen central and state levies
As the country gets ready for the new GST regime from Saturday, July 1, the government has released a 2-minute video highlighting how "simple and easy" the switch-over will really be, amid apprehensions, especially of small traders and businessmen, that it will be a complicated process.
Posted on Twitter today, the video highlights the fact that under GST, if the "annual turnover of your business is less than Rs 20 lakhs, then you are exempt from GST registration."
Also, "if the turnover is up to Rs 75 lakh and you have opted for composition scheme then only one simple return per quarter and an annual return is required."
It also underscores that the composition scheme is designed to provide relief to small businesses. Businesses opting for this scheme will benefit from not having to meet with detailed compliances under GST. However, they will not get the benefit of input tax credit, which is one of the significant changes GST will bring about to help eliminate "tax on tax".
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GST Council earlier this month increased the limit under the composition scheme to Rs 75 lakh, from Rs 50 lakh, to provide relief to more small businesses. If businesses opt for the composition scheme, traders who have below Rs. 75 lakh turnover will have to pay 1 per cent tax, manufacturers will have to pay 2 per cent while restaurant businesses will have to pay 5 per cent.
The video has also highlighted how the process of filing of returns under GST has been made "easy". The GST requires businesses to file three online returns each month.
The government has relaxed the dates for filing of initial returns and traders and businesses now have time till September 5, instead of August 10, for filing the returns.
Finance Minister Arun Jaitley has said that there could be some challenges in the short-term as the nation moves to a new tax regime. "The reform step is for betterment. All reforms initially are seen as disruptive, and in the long run are seen as result yielding reform," he said earlier this month.
He also said that GST over the medium to long term will lead to higher revenues for the Centre and states while also increasing the size of the economy and having a positive impact on economic growth.
GST will be launched at a function in the historic Central Hall of Parliament on the midnight of June 30. The biggest tax reform since Independence, GST will subsume over a dozen of state and central taxes and unify the $2 trillion economy and 1.3 billion people into a single market.
(With agency inputs)