The GST Council in its 32nd Meeting under the Chairmanship of the Union Minister of Finance & Corporate Affairs, Arun Jaitley in New Delhi in a bid to give a boost to the MSME sector (including Small Traders) among others announced Higher Exemption Threshold Limit for Supplier of Goods.
“There would be two Threshold Limits for exemption from Registration and Payment of GST for the suppliers of Goods i.e. Rs 40 lakhs and Rs 20 lakhs. States would have an option to decide about one of the limits within a weeks’ time. The Threshold for Registration for Service Providers would continue to be Rs 20 lakhs and in case of Special Category States at Rs 10 lakhs,” said the official communique.
Encouraged by the outcome of the GST Council Meeting in a statement issued, Chandrajit Banerjee, Director General, CII, said “we compliment the GST Council for bold decisions to bring huge relief to the Micro, Small and Medium Enterprises (MSME) under GST. The GST Council under the chairmanship of Arun Jaitley, Minister of Finance and Corporate Affairs, has displayed high sensitivity to concerns of the industry in general since the GST was introduced in July 2017. It has reduced taxes on many items, addressed procedural issues, and taken into account the issues faced by the MSME sector in particular. CII greatly appreciates the proactive and positive role being played by the GST Council in ensuring that GST is the most transformational reform in India’s tax regime,” he added.
Banerjee stated, “By raising thresholds of various GST categories, the Council has signalled its intention to facilitate MSME compliances and promote Ease of Doing Business. Increasing the threshold, relaxation of payment from monthly to quarterly and annual filing under the Composition Scheme greatly simplifies the tax regime and takes a big burden of compliance off the MSME sector which would eventually lead to lower costs and higher competitiveness for MSME. Initiating a composition scheme for the services enterprises is a landmark step and will integrate these enterprises with their manufacturing counterparts. We welcome the GST Council’s focused attention to the MSME sector which has been suffering from global economic fluctuations and subdued domestic demand.”
Echoing similar sentiments, FICCI welcomed doubling of GST exemption threshold from Rs 20 lakh to 40 lakh. “This is one of the most crucial decisions of the Council and would indeed help a large number of taxpayers. It is a big step in the right direction and I am confident that going forward the Council may consider increasing it further,” said Mr Sandip Somany, President, FICCI.
The decision regarding raising of the annual turnover limit for composition scheme to Rs 1.5 crore from the current Rs 1 crore, coupled with the facility of quarterly payment of tax along with annual return filing, is a major relief for businesses. “This is a major step towards tax simplification and will ensure ease of compliance,” said Somany.
The proactiveness of the Council in understanding the concerns of the small service providers and announcing expansion of the composition scheme to them and those making mixed supplies (goods and services) with a threshold upto to Rs 50 lakh with a tax rate of 6% will benefit the industry significantly. FICCI had suggested this measure to make the composition scheme available to the service providers also. All the decisions in the meeting are aimed to simplify the compliance mechanism for the small businesses and pave the way for bringing stability in GST regime.