Union Minister for Chemicals and Fertiliser Ananth Kumar today said the input credit collected from traders under the Goods and Services Taxes (GST) would be deposited into the account of traders within a fortnight.
Kumar said the liquidity in the market would increase with the depositing of input credit.
"Input credit that was collected till now will be calculated on October 10 and 18. After a fortnight, the amount will be credited into the account of traders.This will enhance liquidity in the country. The economy will improve," he told reporters here.
"It is estimated that about Rs 50,000 crore will be paid to the traders. It will strengthen the economy," he said.
The Union Minister said the decision taken by the Finance Minister and the GST council yesterday has brought great relief to the Micro, Small and Medium Enterprises (MSME) and small traders.
He explained that the composite tax limit has been increased up to Rs one crore.
"MSMEs and small traders who do trade up to Rs one crore, for them one per cent and two per cent and for restaurants and eateries the tax has been brought to five per cent. I feel that a majority of traders and MSMEs are relieved now." Kumar said the turnover limit for composite tax of one per cent and two per cent on MSMEs and small traders has been increased from Rs 75 lakh to Rs one crore.
Similarly, the benefit of five per cent GST on hoteliers has been increased by enhancing the turnover limit.
"I feel that a majority of traders and MSMEs are satisfied now," said Kumar.
In addition to it, the rule of filing returns every month has been amended for small traders, said the union minister.
He added that traders with a turnover of Rs 1.5 crore can now file returns once in three months. Similarly, many relaxations have been given to exporters.
Kumar said the government has addressed the problem of reverse tax at yesterday's meeting.
"There was a major problem of reverse taxation. Earlier, GST was borne by those who used to avail services or goods from small traders. Now, that has been suspended. Now there is no need to pay reverse tax."
Kumar said GST itself is a major reform.
He said at present there is one market in the entire tax structure with no restriction on transportation like entry tax or Octroi and sales tax.
All 21 taxes have been merged with one GST.
Goods and Services Tax has brought 6.5 crore traders into the tax net, which was earlier three crore," the minister said.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)