New Delhi : Maximum Retail Price(MRP) of goods must include Goods and Service Tax(GST) component, a high-level panel of state finance ministers recommended to the GST Council.
The group of Ministers (GoM) headed by Assam finance minister Himanta Biswa Sarma, has also recommended easing compliance burden on small and medium enterprises(SMEs) by a govt clarification in the present law that MRP is the maximum retail price of a product and charging anything above will amount to offence.
The rule, people in the know said, must be applied to establishments like restaurants, eateries and malls that sell packaged goods that carry the MRP tag.
The group pointed out that GST is being charged above MRP at some places.
However while filing returns, businesses can show the GST component separately from NRP, they added.
GoM also recommended lowering penalty for delayed filing of returns to Rs. 50 a day from the present Rs. 100.
Currently, businesses with turnover up to Rs. 1.5 crore have to file taxes every quarter.
- GoM’s major recommendation pertains to slashing tax rate to 1% for manufacturers and restaurants and easing norms for traders opting for it.
- Manufacturers and restaurants with turnover of up to Rs. 1 crore are required to file taxes each quarter and pay GST of 2% and 5% respectively under composition scheme. The same for traders is 1%.
- GoM has asked to do away with the tax-rate distinction between AC and non-AC restaurants, not covered under the composition scheme and instead tax them at 12% input credit.
- Also restaurants inside hotels with room tariff above Rs. 7,500 should attract uniform 18% tax rate instead of separate category for 5-star hotel, GoM recommended.