New Delhi, Jan 10 (ANI): In a big relief for small traders, the GST Council on Thursday decided to exempt businesses with annual turnover of up to Rs 40 lakh from paying taxes under the Goods and Services Tax (GST), raising the threshold from Rs 20 lakh.
For small and hilly states like Jammu and Kashmir and those in north-eastern region, the threshold has been raised from Rs 10 lakh to Rs 20 lakh. These states, however, will be free to increase the limit further on their own.
The GST Council, at a meeting here, also increased the annual turnover for availing Composition Scheme to Rs 1.5 crore from April 1, up from Rs 1 crore now, Union Finance Minister Arun Jaitley said while briefing the media on the deliberations.
Enterprises under its purview will pay tax quarterly and file returns only once a year.
The Council also approved the Composition Scheme for services. Hence, services and goods providers will get the benefit of the Composition Tax, Jaitley said told reporters after the meeting. The Composition Scheme will reduce the compliance burden.
Jaitley said most of the GST comes from the economy's formal sector. Hence small companies will have the option to opt out of GST net.
However, no decision was taken on Thursday regarding the real estate sector and supply of services by small service providers like lotteries in some states. These issues will be examined by a Group of Ministers (GoM) and taken up in the next GST Council meeting.
Asked about GST on construction-related material like cement, the Finance Minister said the rate on individual items like cement will depend on revenues generated. At present, the GST slab for 8 items of cement industry is under 28 per cent slab.
In an interview to ANI earlier this month, Prime Minister Narendra Modi said the government is in favour of bringing construction-related material in the 5 per cent slab of GST.
The construction sector is one of the largest employment generators in the country and its rapid growth is crucial for the government's ambitious affordable housing scheme. (ANI)