Summary: The GST Council met on July 21, 2018 and reduced items in the 28% bracket and made the filing process easier for SMEs with revenue up to INR 5 crore. Outgoing Chief Economic Advisor is confident that the tax bracket will be whittled down further, and the Government will continue to make life simpler for SMEs with policies with regards to GST.

Outgoing Chief Economic Advisor Arvind Subramanian was optimistic and exuded confidence that the GST would move to a three-tier structure. The fourth bracket of 28% would be “virtually a hollow shell” in just over a year. “I am very confident that over the next year so that 28 per cent hopefully will be virtually a hollow shell,” he said.

The GST Council met last Saturday, revising the tax bracket and also voting to simplify the tax filing process for companies to once in 3 months with a revenue up till INR Crores. A vast majority of SMEs in the nation will benefit from this ruling. Tax will still be calculated on a monthly basis but their will only be quarterly filing.

Over the last one year, the GST Council has removed from the 28% bracket 191 items including air-conditioners, televisions and perfumes. Only 35 goods are left in the bracket, as opposed to 226 at launch.

According to Subramanian, the Government has been mindful about simplifying the burden on small and medium enterprises. SMEs being the backbone of the economy in terms of growth and the overall percentage of labour workforce involved in their operations.