Providing relief to small traders, the Goods and Services Tax (GST) Council on Thursday decided to exempt businesses with turnover of Rs 40 lakh, raising the threshold from Rs 20 lakh.
It also decided to increase the Composition Scheme limit to Rs 1.5 crore from April 1.
However, no decision was taken regarding the real estate sector and supply of services by small service providers like lotteries in some states.
These issues will be examined by a Group of Ministers (GoM) and will be taken up in the GST Council meeting, Union Finance Minister Arun Jaitley told reporters.
In a briefing of the 32nd meeting of the GST Council meeting on Thursday, the finance minister made the following announcements.
1. Threshold limit increased to 40 Lakhs
Effective April 1, the GST exemption threshold has been raised from Rs 20 lakh to Rs 40 lakh. For hilly states and those in the North East, the threshold has been doubled to Rs 20 lakh.
2. Power to states
Now states will be able to choose if they want to keep the GST exemption limit at Rs 20 lakh or Rs 40 lakh, Jaitley said.
3. Composition limit increased to Rs 1.5 crore from the present Rs 1 crore
The existing Composition Scheme turnover threshold raised to Rs 1.5 crore. Those who use the scheme from April 1, 2019
4 Quarterly payment and Annual Return
Now Composition taxpayers will pay tax quarterly, but file returns annually.
5 Composition scheme for services
Those providing services or mixed supplies (goods and services) with a turnover up to Rs 50 lakhs will now be entitled to avail composition scheme.
6 Rate for services under comp scheme @ 6%
Compounding rate for services under composition scheme is fixed at 6 percent.
A committee has been set up to consider real estate GST rates, a consensus is yet to be achieved, said FM Arun Jaitley.
8 Calamity cess by Kerela @1%
GST Council lets Kerala levy 1% cess for 2 years on intra-state sales.