Prime Minister Narendra Modi, while defending his government's track record in managing the economy, on Wednesday said that both demonetisation and the implementation of GST were structural reforms. While Amit Shah cut short his tour of Kerala, Jaitley returned from Dhaka for the meeting.
The council slashed tax on 27 items, including unbranded Aurvedic medicines.
- ICDS food packets for children reduced from 18% to 5%.
- Paper waste from 12% to 5%.
Man made yarn was taxed 18%, it has been put in 12% slab, will have effect on textiles.
Diesel engine parts will not attract 18% GST, compared to 28% before.
GST rate on parts suitable for use exclusively or principally with fixed Speed Diesel Engines of power not exceeding 15HP and parts suitable for use exclusively or principally with power driven pumps primarily designed for handling water, namely, centrifugal pumps (horizontal and vertical), deep tube-well turbine pumps, submersible pumps, axial flow and mixed flow vertical pumps has also been reduced from existing 28% to 18%.
Printing job work will now be taxed at 5%.
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It also said that 44 percent of the ads were seen before the November 2016 election and 56 percent were seen afterward. If you recall from election night, the States of MI and Wisconsin were two of the closest races in the entire nation.
He also clarified that small businesses will also have to file returns for three months - July, August and September - and can switch to quarterly filing from 1 October.
Ajay Sahai, head of the Federation of Indian Export Organisation, said he expected the government to allow its 25,000 small and medium-sized members to file tax returns quarterly.
Those in the business of trading with revenue of up to Rs 1 crore a year will pay a flat tax of 1%; manufacturers will pay 2%; while restaurants will pay 5%, Arun Jaitley said. Earlier, exporters did not have to pay taxes for imports used for exports.
The availability of credit and more so the cost of credit is adversely impacting them and on account of this, the government should consider introduction of e-wallet for exporters, FIEO had said.
According to the report, transition into the new taxation is going to significantly affect the industrial units with weak profiles, especially the small units. However, post GST, IGST blocked their working capital. "And refunds will be offset against this". "Moreover, an e-wallet will be created for each exporter by April 1, 2018 to carry forward the process", he added. "A professional tech firm will be appointed".
"Committee of officers had examined their problems. the facility for processing their refunds may take some more time".
Finance Minister Arun Jaitley is now chairing the meeting of the council. This is an interim measure.
This is an interim decision and the long term solution is not exempting in GST. These collections will not be the complete picture as these two months were early transitional phase.