GST Council on 10th January 2019 has taken some major decisions keeping MSME and small traders in mind.
Following are the key decision taken at the 32nd GST Council meeting:
- Increased exemption threshold limit for suppliers of goods:
GST exemption threshold is now being increased to Rs.40 lakh. Also, the threshold limit for Special category States has been increased to 20 lakh effective from 1st April 2019.
There is no change in exemption threshold for service providers, it will be continued to be 20 lakh and in case of Special category States Rs.10 lakhs.
Section 22 of CGST Act has been amended to increase the exemption threshold for supplier of goods.
However, Section 24 of CGST Act 2017 overrides Section 22 of CGST Act 2017. Section 24 makes it compulsory for certain categories of person to register under GST irrespective of aggregate turnover of 40 lakhs for supplier of goods and 20 lakhs for service providers.
Since there is no amendment being made in Section 24 of CGST Act 2017, the following persons are still required to get themselves register under GST :
1) Person making Inter-state taxable supply ;
2) Person who are required to pay tax under Reverse charge;
3) Persons who make a taxable supply of goods and services or both on behalf of other taxable person whether as an agent or otherwise;
4) Input service distributor
5) E-commerce operators (who is required to collect TCS under section 52) and all suppliers on e-commerce platforms are covered;
6) Non-Resident taxable person making taxable supply;
7) Every person supplying online information and data base access or retrieval services from a place outside India to a person in India, other than a registered person;
8) Such other person or class of persons as may be notified by the Government on the recommendations of the Council.
- Changes in Composition Scheme under GST :
Composition scheme shall be made available to supplier of services or mixed suppliers having an annual turnover in preceding financial year upto Rs.50 Lakhs with effect from 1st April 2019.
This comes as a relief to the small service providers, who were hoping for big relief from the government as they were not allowed to take benefit of composition scheme earlier.
However, Government had allowed existing composition taxpayers to supply services (other than restaurant services), for upto a value not exceeding 10% of Turnover in the preceding financial year, or Rs. 5 lakhs, whichever is higher.
The rate of tax for this new composition scheme has been fixed at 6% and the turnover limit has been set at Rs.50 lakh. Taxpayers falling under this scheme, are liable to file only one annual return with quarterly payment of taxes (with simple declaration)
b) Increase in turnover limit for the existing composition scheme:
One of the key decision taken at the 32nd GST council meeting was to increase the existing turnover limit to 1.5 crore.
Special category states have been given the option to decide about the composition limit in their respective states.
- Other key takeaways :
Free accounting and Billing software will be provided by the Goods and Services tax Network to the small taxpayers.
Kerala Government have been given permission to levy 1 per cent calamity cess for 2 years to collect funds for rehabilitation .
Committee has been set up to examine the proposal of giving composition scheme to boost the residential segment of the real estate sector.