Boost for SMEs: Exemption limit for GST hiked to Rs 40 lakh from Rs 20 lakh

NEW DELHI: In a big boost to the small businesses, Union finance minister Arun Jaitley on Thursday said the GST Council has doubled the annual turnover exemption limit for the composition scheme. The council has increased the GST exemption limit to Rs 20 lakh from Rs 10 lakh for the north eastern states and Rs 40 lakh, from Rs 20 lakh, for the rest of the country, Jaitley added.

The finance minister also said that the annual turnover for availing composition scheme has been increased to Rs 1.5 crore from Rs 1 crore, effective from April 1, 2019.

Businesses under the scheme will now pay tax on a quarterly basis but the returns will be filed annually, Jaitley added. He also stated that the council has approved composition scheme for the services sector. The GST council is headed by the finance minister.

Jaitley further stated that the small companies would have the option to opt out of the GST tax net.

For Kerala, the finance minister said that the state is now entitled to intra-state trade and can impose a cess of maximum 1 per cent for a period of two years.

On including real estate and lottery under the GST (Goods and Services Tax), the council decided to form a seven-member group of ministers after differences of opinion emerged at the meeting, Jaitley said.