NEW DELHI: In a big boost to the small businesses, Union finance minister Arun Jaitley on Thursday said the GST Council has doubled the annual turnover exemption limit for the composition scheme. The council has increased the GST exemption limit to Rs 20 lakh from Rs 10 lakh for the north eastern states and Rs 40 lakh, from Rs 20 lakh, for the rest of the country, Jaitley added.
The finance minister also said that the annual turnover for availing composition scheme has been increased to Rs 1.5 crore from Rs 1 crore, effective from April 1, 2019.
Businesses under the scheme will now pay tax on a quarterly basis but the returns will be filed annually, Jaitley added. Also, service providers and suppliers of both goods and services up to a turnover of Rs 50 lakh would be eligible to opt for the GST composition scheme and pay a tax of 6 per cent. The GST council is headed by the finance minister.
The twin decision under the composition scheme would have an annual revenue impact of about Rs 3,000 crore.
Jaitley further stated that the small companies would have the option to opt out of the GST tax net.
Under the composition scheme, traders and manufacturers can pay taxes at a concessional rate of 1 per cent, while restaurants pay 5 per cent GST.
For Kerala, the finance minister said that the state is now entitled to intra-state trade and can impose a cess of maximum 1 per cent for a period of two years.
On including real estate and lottery under the GST (Goods and Services Tax), the council decided to form a seven-member group of ministers after differences of opinion emerged at the meeting, Jaitley said.
The council also decided that free accounting and billing software will be provided to small taxpayers by GSTN.
There are over 1.17 crore businesses which have registered under the GST. Of these over 18 lakh have opted for composition scheme.
