GST exemption limit doubled to Rs 40 lakh

New Delhi, January 10

In a “massive relief” to small businesses, the GST Council today doubled the limit for exemption from payment of goods and services tax (GST) to Rs 40 lakh and announced that the higher turnover cap of Rs 1.5 crore for availing composition scheme of paying 1 per cent tax will be effective from April 1.

Finance Minister Arun Jaitley said the taxpayers with an aggregate turnover of Rs 40 lakh would now be exempted from GST. The earlier limit was Rs 20 lakh. For the north-eastern states, the exemption limit has been hiked to Rs 20 lakh from earlier Rs 10 lakh.

The annual revenue loss on account of doubling exemption limit, considering that all states implement it, is Rs 5,200 crore.

Jaitley said the GST Composition Scheme, under which small traders and businesses pay 1 per cent tax based on turnover, can be availed by businesses with a turnover of Rs 1.5 crore, against the earlier Rs 1 crore, with effect from April 1.

Businesses opting for the scheme would have to file just one return annually and pay taxes once every quarter. Free accounting and billing software will be made available to small assessees up to Rs 1.5 crore turnover. 

Meanwhile, the GST Council constituted a seven-member group of ministers (GoM) to look into the issues of GST rates for the real estate sector.  Another GoM will look into uniformity of tax rates in case of lotteries. — PTI