At present, businesses with turnover up to Rs 20 lakh are exempt from paying Goods and Services Tax. The GST Council may increase the exemption threshold for small businesses who are now forced to register under GST.
HIGHLIGHTS
- Key decisions will be taken by the GST Council on recommendations approved by several ministerial panels
- The Council is expected to address GST issues faced by small and medium-scale industries
- It is also expected to ease GST burden on the real estate sector
The 32nd Goods and Services Tax (GST) Council meeting on Thursday (January 10) is expected to discuss several recommendations suggested by different ministerial panels.
Today’s meeting will decide the fate of medium and small-scale industries and the ailing real estate sector.
Another key announcement that is expected today revolves around the recommendations of a ministerial panel with regards to composition scheme for the service sector.
Having said that, here are some key points to watch out for at today’s GST Council meeting:
MSMEs likely to get relief
A ministerial panel under Minister of State for Finance Shiv Pratap Shukla has sought more relief for the medium and small-scale sector, which is going through a rough period due to unforgiving GST norms.
The ministerial panel has mulled increasing the exemption threshold for such businesses. At present, businesses with turnover up to Rs 20 lakh are exempt from paying Goods and Services Tax.
Bihar deputy chief minister Sushil Modi, who is also a member of the ministerial panel, said the Group of Minister (GoM) agreed that the exemption limit for MSMEs the main supplier of goods should be increased.
Read Also : Ministers propose to shield small units from GST burden
However, it could not be approved in the last meeting due to lack of uniformity among states. While Delhi asked for the threshold limit to be increased to Rs 40 lakh, Bihar suggested it should be Rs 50 lakh.
A suggestion was also made to levy a GST of Rs 5,000 for MSMEs with a turnover of Rs 50-60 lakh and Rs 10,000-15,000 for those with a turnover of Rs 60-75 lakh.
It is likely that the Council will announce a holistic decision after taking into account all the recommendations.
Real estate boost likely
Today’s decisions could also make transactions in the real estate sector more favourable. The Council is slated to take a decision on reducing GST on under-construction flats and residencies from 12 per cent to 5 per cent. However, it is unlikely that the Council will extend input tax credit (ITC) benefit to the construction industry.
Finance Minister Arun Jaitley had earlier attributed subdued GST collections to the ailing sector.
Composition scheme for service sector
At present, the composition scheme can only be availed by manufacturers and traders. The service sector, which was earlier disallowed from availing the composition scheme due to its enormity, is likely to get a much-needed relief.
The Council may approve a composition scheme, with quarterly returns and nominal tax rate, for taxpayers with a revenue threshold of up to Rs 1 crore.
Calamity cess for Kerala
Last but not the least, it is likely to approve another ministerial recommendation to allow Kerala to levy 1 per cent calamity cess for period of two years to fund the rehabilitation work in the state that was hit by a major flood in 2018.
Read Also : GST panel approves 1% ‘calamity cess’ for Kerala floods
The panel headed by Sushil Modi recommended that any other state that wants to claim calamity cess should be allowed after taking permission from the GST Council.
