Arun Jaitley announced a series of measures under Goods and Services Tax (GST) to boost small business.
Finance Minister Arun Jaitley on Thursday announced a series of measures under Goods and Services Tax (GST) to boost small businesses, while ruling out any more cuts under the indirect tax system until revenues improve. The decision to hold rate cuts under GST comes in the backdrop of shrinking collections under the indirect tax. "We will consider any further reductions on individual items only when revenues move up," the finance minister said in a press conference after conclusion of the GST Council meeting.
Here are 10 things to know:
- The GST Council decided to raise the scope of the composition scheme to Rs 1.5 crore from Rs 1 crore. Under GST, the composition scheme enables small traders and businesses to pay a small tax based on turnover rather than value addition.
- The composition scheme has also been extended to the service sector. Those providing services and mixed supplies (goods and services) with a turnover up to 50 lakh under the tax net, will now be entitled to avail the scheme, said the finance minister. The composition rate for services will be 6 per cent of annual turnover.
- The GST Council doubled the GST exemption limit to Rs. 20 lakh for "Special Category" states which include hill states and north eastern states and Rs. 40 lakh for the rest of the country.
- States have one week to decide the exemption limit (out of Rs 20 lakh and Rs 40 lakh) based on their revenue position, said a finance ministry statement. They'll have an option to opt-out or opt-down at a later stage, said the finance minister.
- The moves would give relief to MSMEs (micro, small and medium enterprises), Mr Jaitley said.
- Currently, firms with an annual turnover of up to Rs 20 lakh are exempted from registration for GST. The change will come into effect from April 1.
- A finance ministry official said the decision could benefit about two million firms, news agency Reuters reported.
- The finance minister, who chairs the GST Council, said businesses availing the GST composition scheme will now be required to file just one annual return, and pay taxes once every quarter.
- Among other key measures, the GST Council permitted Kerala to levy a calamity cess of 1 per cent on intra-state sales for up to two years.
- The government also announced the formation of a group of ministers to examine the proposal of giving a composition scheme to boost residential real estate. The seven-member committee will submit its report in the next meeting, he noted.
(With agency inputs)
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