While the advantages of GST in India are still being debated, the GST Council in its 32nd meet has proposed some major changes. The Council has increased the Goods and services tax exemption limit from the current Rs. 20 lakh to Rs. 40 lakh for other states, while doubling the exemption limit to Rs. 20 lakh from Rs. 10 lakh for hilly and north eastern states.
It means businesses in other states of India with an annual turnover up to Rs. 40 lakh will not have to register under GST. On the other hand, enterprises in the hilly states with annual turnover up to Rs. 20 lakh need not register under Goods & services tax in India.
The new exemption limit will be applicable from 1st April 2019 and is expected to ease compliance for a majority of enterprises, particularly SMEs. Another major change brought by the GST Council is to extend the threshold limit under the composition scheme from the earlier Rs. 1 crore to Rs. 1.5 crore. GST in India under the composition scheme requires business entities to pay taxes every quarter unlike normal taxpayers who need to pay taxes monthly.
Also, those under the composition scheme pay taxes at a concessional rate of 1%. Record keeping is also quite easy. The higher threshold limit under the concessional scheme would give enterprises a little more flexibility to enrol themselves under the scheme and avail its benefits. Composition scheme has also been announced for two new categories of businesses – services and those selling goods and services.
The new exemption limits are expected to boost growth for SMEs in the country which are still struggling for profits in the post Goods and services tax era.
Additional read: Advantages of GST in India: New GST Exemption Limit You Should Know
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