GST relief for SMEs, tax exemption limit doubled to Rs 40 lakh

| | New Delhi
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GST relief for SMEs, tax exemption limit doubled to Rs 40 lakh

Friday, 11 January 2019 | PNS | New Delhi

In a bid to give relief to small businesses ahead of Lok Sabha elections, the Goods and Services Tax (GST) Council on Thursday doled out benefits to medium and small-scale enterprises (MSMEs) with regard to GST exemption and approved 6 per cent composition scheme for the services sector. 

The council has increased the GST exemption limit to Rs 20 lakh from Rs 10 lakh for the North-eastern States, and to Rs 40 lakh from Rs 20 lakh for the rest of the country. The council raised the higher turnover cap to Rs 1.5 crore for availing composition scheme of paying 1 per cent tax. It will come into effect on April 1.

The council also decided to extend the composition scheme to traders from informal sector rendering services or mixed supplies with a turnover up to Rs 50 lakh and composition rate for services sector has been fixed at 6 per cent.

The council also approved recommendations pertaining to calamity cess in Kerala. The State Government will now levy 1 per cent calamity cess for a period of two years on products and services to fund rehabilitation in the State.

Under the composition scheme, traders and manufacturers can pay taxes at a concessional rate of 1 per cent, while restaurants pay 5 per cent GST. There are over 1.17 crore businesses which have registered under the GST.