A great breather for SMEs, Union Finance minister Arun Jaitely has double the exemption limit of Goods and Services Tax (GST). Now, a small business with an annual turnover of up to Rs 40 lakhs is free from registration and payment of GST. For hilly states and North Eastern states, it is increased from Rs 10 lakhs to Rs 20 lakhs. There’s more to it. For, composition scheme the annual turnover limit for businesses has been hiked to Rs 1.5 crore from Rs. 1 crore. Out of 1.17 crore registered business, over 18 lakh have availed the composition scheme.
Under this scheme, small goods and services suppliers can avail the benefit if they have a turnover of up to Rs.50 lakhs and pay 6% GST. Adding to the composition scheme feature, traders and manufacturers can avail a concessional rate of 1% on the tax payments. Restaurants can pay a 5% GST. Dealers under this scheme are required to pay tax quarterly and file a return on annual basis.
These schemes will be implemented on April 1, 2019. As a result, the Government is likely to witness a downfall in the annual revenue of Rs 5200 crore.
Since there was a difference of opinion on including lottery and real estate business, Jaitely has decided to create a group of ministers with seven members. The council decided to offer small taxpayers with free accounting and billing software.
Adding to his decision, Kerala is allowed to impose a cess of up to 1%. This is applicable to intra-state trade of goods and service. This is valid for a maximum of two years.