New Delhi, Jan 10: Giving a big relief to the MSME sector and small traders, the Goods and Services Tax (GST) Council on Thursday increased the limit of annual turnover for availing the composition scheme to Rs 1.5 crore from existing Rs 1 crore.
The scheme would come into effect from new financial year April 1, 2019, Union Finance Minister Arun Jaitley told reporters. He was briefing media about the decisions of the 32nd GST Council meet.
Jaitley said special category states would take decision about the composition limit in their respective states within one week.
He said under the composition scheme, traders would now need to file only single annual return though payment of taxes would remain quarterly along with a simple declaration.
The Council also raised the bar of threshold limit for exemption from registration and payment of the GST to Rs 40 lakh from existing Rs 20 lakh while the limit for NorthEast and hilly states was hiked to Rs 20 lakh from Rs 10 lakh.
Jaitley said, “Like previous option this time too, Northeast and hilly states will have an opportunity to decide about their limits. They have options to either move up or move down. They have to decide about one of the limits within a week.”
He said the threshold for registration for service providers would continue to be Rs 20 lakh and in case of special category states Rs 10 lakh.
A composition scheme, he said, would also be available for suppliers of services who have annual turnover of up to Rs 50 lakh in the preceding financial year. Under the scheme, the service suppliers would give 6 per cent tax – 3 per cent CGST and 3 per cent SGST.
The scheme would be applicable to both service providers and suppliers of goods and services who are not eligible for the presently available composition scheme for goods. (UNI)