Big boost to small businesses: GST Council doubles exemption limit to Rs 40 lakh

The threshold for registration for service providers would continue to be Rs 20 lakh, and in case of special category states at Rs 10 lakh.

In a big relief to small businesses, the Goods and Services Tax (GST) Council has doubled the exemption limit for registration of units with an annual turnover of up to Rs 40 lakh.
 
Earlier, the GST registration limit for MSMEs was Rs 20 lakh. However, some of the north-eastern and hilly states will have a new limit of Rs 20 lakh from Rs 10 lakh earlier.
 
There would be two threshold limits for exemption from registration and payment of GST for the suppliers of goods that is, Rs 40 lakh and Rs 20 lakh. 
 
The threshold for registration for service providers would continue to be Rs 20 lakh, and in case of special category states at Rs 10 lakh.
 
The decision was taken at the GST Council, in its 32nd meeting held on Thursday, under the chairmanship of the Union Minister of Finance & Corporate Affairs Arun Jaitley in New Delhi.
 
“Every decision is intended to help MSMEs (micro, small and medium enterprises). We have given them various options," Jaitley was quoted as saying to reporters after the meeting. 
 
A release by Ministry of Finance said, "A Composition Scheme shall be made available for suppliers of services (or mixed suppliers) with a tax rate of 6 per cent (3 per cent CGST + 3 per cent SGST) having an annual turnover in the preceding financial year up to Rs 50 lakh." 
 
The Council decided to constitute seven member Group of Ministers to examine the proposal of giving a composition scheme to boost the residential segment of the real estate sector. The release also said, "A Group of Ministers shall be constituted to examine the GST rate structure on lotteries."
 
In addition, GST Council approved levy of cess on intrastate supply of goods and services within the state of Kerala at a rate not exceeding 1 per cent for a period not exceeding 2 years.

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