New Delhi, Jan 10: The sops and reliefs continue before the 2019 elections.In a bid to give relief to small businesses and MSMEs the GST Council Thursday doubled the exemption limit and raised the threshold for availing the composition scheme.
The exemption threshold for small businesses was increased to Rs 20 lakh to Rs 40 lakh and also allowed Kerala to impose a natural disaster cess of upto 1 per cent for a period of upto two years.
Till now, businesses with turnover up to Rs 20 lakh were exempt from paying Goods and Services Tax (GST).
Announcing the decisions after the GST Council meeting here, Finance Minister Arun Jaitley also ruled out any further cuts in tax rates and said “reductions will be made only when revenues move up”.
He said while under original GST structure, it was envisaged for those with turnover upto 20 lakh to get exemption, the threshold for some northeastern and hill states was kept at Rs 10 lakh.
“We have decided to continue with the twin structure with two slabs. While the Rs 20 lakh threshold has been doubled to Rs 40 lakh, for smaller states, the exemption has been kept at Rs 20 lakh,” Jaitley said.
The scope of the GST Composition Scheme, under which small traders and businesses pay a small tax based on turnover rather than value addition, was raised to Rs 1.5 crore from Rs 1 crore.
The twin move would give relief to micro, small and medium enterprises (MSMEs), he said.
Jaitley said that the businesses under the scheme will now have to pay tax on a quarter-to-quarter basis. However, the returns will be filed annually. GST Council, headed by the finance minister, also approved composition scheme for the services sector.
Even before the decision, some states, including Jammu and Kashmir and Assam, had amended their laws to increase the Rs 10 lakh threshold to Rs 20 lakh.
Jaitley said the states with the new limit of Rs 20 lakh will have the option to “opt up” and states with Rs 40 lakh limit will have the option to “opt down” over concerns of erosion of assessee base.
He said while the decision would make over 20 lakh businesses eligible for exemption, all of them may not avail it in order to continue to enjoy benefits of GST like input tax credit.
On including real estate and lottery under the Goods and Services Tax, the council decided for form a seven-member group of ministers after differences of opinion emerged at the meeting, he said.News24 Bureau/ PTI