New Delhi: In a major relief to small traders ahead of the Lok Sabha polls, the GST council on Thursday raised the exemption limit for them to Rs 40 lakh. The exemption limit in the north eastern states has been raised to Rs 20 lakh. Small traders have generally been considered BJP’s core support base and the latest decision of the GST council is being seen as an attempt to win them back. The implementation of the GST in 2017 had hit this class hard. Reports suggest that BJP was ditched by a section of the business community in recently held assembly elections in the Hindi heartland states, unhappy with the GST burden.
- Prime Minister Narendra Modi, during his interview to ANI had said that he was in favour of increasing the exemption limit to Rs 75 lakh.
2. In its meeting on Thursday, the GST council also raised the threshold limit for availing the composition scheme to Rs 1.5 crore from Rs 1 crore. Under the composition scheme, small taxpayers can get rid of tedious GST formalities and pay GST at a fixed rate of turnover. This scheme could be adopted by taxpayer whose turnover is less than Rs 1 crore. What’s more, traders with a turnover of up to Rs 50 lakh can now also avail the composition scheme at a rate of 6 per cent. Those who avail the scheme will have to file tax on a quarterly basis, though returns can be filed annually.
3. “The twin move would give relief to micro, small and medium enterprises (MSMEs), Finance Minister Arun Jaitley, who chaired the council meeting, told reporters during his briefing.
4. On the vexed issue of bringing uniformity in the GST rate applicable to real estate and lottery under the GST, the council decided to form a form a seven-member group of ministers after differences of opinion emerged at the meeting, he said.
5. As of now, 12 per cent GST is levied on payments made for under-construction property or ready-to-move-in flats where completion certificate has not been issued at the time of sale. However, no GST is levied on buyers of real estate properties for which completion certificate has been issued at the time of sale. Some reports had suggested that the council was expected to reduce GST on under-construction flats and residencies from 12 per cent to 5 per cent.
6. The Council also allowed Kerala to levy a calamity cess of 1% on intra-state sales for a maximum period of two years.
7. In its last meeting, the council had slashed the rates on 22 items and set up a committee to study bringing some of the sin goods and cement out of the highest tax slab of 28 per cent.