Government doubles GST limit exemption for SMEs
In order to give relief to small and medium enterprises, the GST Council which met in Delhi on Thursday doubled the exemption limit.
With this, the exemption limit is ₹20 lakh for north eastern states and ₹40 lakh for the rest of the country.
The GST Council also increased the threshold to avail the Composition Scheme. The current threshold is ₹1 crore and it was raised to ₹1.5 crore.
The businesses under the Composition Scheme will pay the tax as per their turnover rather than value addition. They have to file returns once in a year by paying tax every quarter.
Finance Minister Arun Jaitley said that this would help ease the process.
Kerala is allowed to impose one percent cess on intra-state sales for up to 2 years. This will help the state rebuild its original status that has been lost due to the worst floods.
Difference of opinions have emerged on several areas including real estate and lottery under the Goods and Services Tax. Hence, the GST council decided to form a seven-member group of ministers.
The Finance Minister in the last month stated that the government would work towards single national sales tax rate ranging between 12 percent and 18 percent.
The current range for most of the items is 5 percent to 28 percent. These are the initial rates when the tax was introduced last year.
However, the Council is constantly reviewing the rates and reducing them wherever they seem to be apt.
Yet, many people claim that most of the items are taxed at higher tax rates.
In this context, the government wants to bring all the items at two standard rates of 12 percent and 18 percent. The rate could be at some mid-point between the two rates.
The government also wants to keep the essential items under the slabs of zero and five percent. And a standard rate would be applicable for luxury and sin goods like cigarettes, alcohol etc.
Image Reference: News18