In a significant development with huge positive implications for J&K economy, the GST Council, which met at Hyderabad in Telangana, today agreed to slash the GST rate on Walnuts from existing 12% to 5%. The Council also approved exemption of small handicraft traders from registration under the new tax regime.
Pertinently, the issue of exemption for small handicraft traders and cutting down GST rate on Walnuts were the two key issues repeatedly flagged by the J&K Government at the GST Council meetings.
"I am thankful to the GST Council for having agreed to our demand and exempting handicrafts from GST while at the same time cutting the GST rate on Walnuts to 5% from the existing 12%," Finance Minister, Dr Haseeb Drabu, who is a member of the GST Council, said over phone from Hyderabad.
Dr Drabu said the Chief Minister Mehbooba Mufti was very keen on these two issues and had asked him to forcefully flag the concerns of the J&K's artisans and Walnut growers at the GST Council meeting.
The Finance Minister said that he had already told a delegation of Walnut growers, who recently met him in Srinagar, that they will benefit if the Walnut is kept under 5% GST slab which will entitle them to Input Tax Credit (ITC). “In case Walnut was kept in zero percent GST slab, the growers would suffer losses as they will be deprived of ITC,” he said.
Regarding the exemption of small handicraft traders under GST, Dr Drabu said the artisans, traders, manufacturers, exporters and raw material suppliers associated with the sector had been demanding rollback of GST on handicrafts.
“We made a compelling case at the 21st GST Council meeting today for exempting small handicraft artisans and traders from GST registration and also bringing down GST slab on Walnuts," he said and added that the interstate handicraft sales up to Rs 20 lakh per annum are likely to not come under the ambit of the GST.
At the 21st GST Council meeting in Hyderabad today, Dr Drabu also came out with the idea to setting up a small group of ministers to examine the issue of technical glitch in GST network. This recommendation came after the report that the GSTN software had witnessed some technical glitches after which the last date of filing had to be extended.
"There are issues with GSTN; there is no doubt about it. But these are transitional and some are operational. We will discuss it with the Council. I would recommend that we set up a small group of ministers to examine and work out a way forward in 2-3 months," he said.
The GST Council is also reported to have extended the last date for filing of sales return or GSTR-1 by a month to October 10, 2017.