New Delhi: In a bid to give relief to small businesses, the GST Council on Thursday doubled the exemption limit and raised the threshold for availing the composition scheme. Also Read - GST Officials Detect Over Rs 830 Crore Tax Evasion by Pan-masala Manufacturing Unit in Delhi
Finance Minister Arun Jaitley said the GST Council doubled the GST exemption limit to Rs 20 lakh for north eastern states and Rs 40 lakh for the rest of the country. Also Read - GST Revenues Cross Trillion Mark For 2nd Straight Month at Over Rs 1.04 Lakh Crore in November
The scope of the GST Composition Scheme, under which small traders and businesses pay a small tax based on turnover rather than value addition, was raised to Rs 1.5 crore from Rs 1 crore. Also Read - GST Collections in Oct May Cross Rs 1 Lakh Crore Mark For First Time in FY21
The twin move would give relief to micro, small and medium enterprises (MSMEs), he said.
The council also allowed Kerala to levy 1 per cent calamity cess on intra-state sales for a period of up to two years.
On including real estate and lottery under the Goods and Services Tax, the council decided to form a seven-member group of ministers after differences of opinion emerged at the meeting, he said.
The development comes a day after Prime Minister Narendra Modi said that he had urged the GST Council to raise the threshold for exemption from the levy’s registration, to Rs 75 lakh annual turnover from the current Rs 20 lakh.
PM Modi said the Centre was taking various steps to help the SME sector, including easing of credit flow. “We are formulating policies so that they do not face cash flow squeeze and that they get easy credit from banks, while the environmental and other clearances come faster,” he said, adding that businesses flourish when rules are simpler.
The GST Council on December 22 decided to cut tax rates on 23 goods and services, including movie tickets, TV and monitor screens and power banks and exempted frozen and preserved vegetables from the levy.
The Council had rationalised the 28 per cent slab and restricted the highest slab to luxury, demerit, and sin goods, besides cement, large screen TV, Air Conditioners and dishwashers.