The GST Council chaired by Finance Minister Arun Jaitley gave major relief to micro, small and medium enterprises (MSMEs) today.
The GST Council doubled the GST exemption limit for companies in the sector to those with an annual turnover of Rs 40 lakh from the current Rs 20 lakh. The limit has been increased for North East and hilly states to Rs 20 lakh from Rs 10 lakh.
However, the move to raise the threshold for GST registration is important considering that small businesses have been hit by the government’s move to demonetise high-value currency notes in November 2016, business disruption in the early days of GST implementation and a credit squeeze in recent months.
According to Prime Minister Narendra Modi, in an interview to news agency ANI on 1 January, the government wanted the threshold to be raised to Rs 75 lakh.
The current turnover limit was increased to Rs 1.5 crore from Rs 1 crore which brings about major changes in the composition scheme. Service providers with a turnover of up to Rs 50 lakh can now avail the composition scheme as well at a rate of 6%. Those who avail the scheme will have to file tax on a quarterly basis, though returns can be filed annually.
Adding to it, the Council also allowed Kerala to levy a calamity cess of 1% on intra-state sales for a maximum period of two years. Two separate groups of ministers were constituted to develop consensus on the issues of real estate and uniformity of taxes on lotteries.
Interestingly, the government has taken various steps to benefit consumers and small businesses ahead of the 2019 Lok Sabha elections including MSMEs loans in 59 minutes, tax relief to National Pension System (NPS) subscribers, GST rate cuts on 22 items, extension of due date for businesses to file various return forms, incentives for onion exporters and tightening of foreign direct investment norms for online marketplaces to protect small traders.
The GST Council chaired by Finance Minister Arun Jaitley gave major relief to micro, small and medium enterprises (MSMEs) today.
The GST Council doubled the GST exemption limit for companies in the sector to those with an annual turnover of Rs 40 lakh from the current Rs 20 lakh. The limit has been increased for North East and hilly states to Rs 20 lakh from Rs 10 lakh.
However, the move to raise the threshold for GST registration is important considering that small businesses have been hit by the government’s move to demonetise high-value currency notes in November 2016, business disruption in the early days of GST implementation and a credit squeeze in recent months.
According to Prime Minister Narendra Modi, in an interview to news agency ANI on 1 January, the government wanted the threshold to be raised to Rs 75 lakh.
The current turnover limit was increased to Rs 1.5 crore from Rs 1 crore which brings about major changes in the composition scheme. Service providers with a turnover of up to Rs 50 lakh can now avail the composition scheme as well at a rate of 6%. Those who avail the scheme will have to file tax on a quarterly basis, though returns can be filed annually.
Adding to it, the Council also allowed Kerala to levy a calamity cess of 1% on intra-state sales for a maximum period of two years. Two separate groups of ministers were constituted to develop consensus on the issues of real estate and uniformity of taxes on lotteries.
Interestingly, the government has taken various steps to benefit consumers and small businesses ahead of the 2019 Lok Sabha elections including MSMEs loans in 59 minutes, tax relief to National Pension System (NPS) subscribers, GST rate cuts on 22 items, extension of due date for businesses to file various return forms, incentives for onion exporters and tightening of foreign direct investment norms for online marketplaces to protect small traders.
