The GST Council in its 32nd meeting held on 10th Jan 2019 considered the demands raised by the MSME (including the small traders) to increase the threshold limit for registration and to ease the compliance burden under GST. Key highlights of the meeting are as follows:

  • Two higher exemption threshold limit from registration and payment of tax under GST for Supplier of Goods – 40 lakhs and 20 lakhs.
  • The Annual Turnover limit for availing composition scheme increased to Rs. 1.5 crore.
  • Dealers under composition scheme to file one Annual Return with quarterly payment of taxes on the basis of a simple declaration.
  • Composition scheme to be made available to Suppliers of Services (or Mixed Suppliers) with an annual turnover up to Rs. 50 lakhs with a tax rate of 6% (3% CGST + 3% SGST).
  • Levy of Cess on Intra-State supply of goods and services within the State of Kerala at a rate not exceeding 1% for a maximum period of 2 years.

Category wise recommendations made the GST Council is tabulated below:

Higher exemption threshold limit from registration and payment of tax under GST
Sl. No. Type of Suppliers Recommendations made by the GST Council
1 Supplier of Goods There would be two Threshold Limits for exemption from Registration and Payment of GST for the Suppliers of Goods i.e. Rs 40 lakhs and Rs 20 lakhs.

However, each of the individual State Governments must decide on one of the threshold limit within a weeks’ time.

2 Supplier of Services There is no change in the threshold limit for the service providers.

The same would continue to be Rs.20 lakhs and in case of Special Category States at Rs 10 lakhs.

Decisions on Composition Scheme under GST
Sl. No. Category Recommendations made by the GST Council
3 Increase in the Turnover Limit for the existing Composition Scheme The limit of Annual Turnover in the preceding Financial Year for availing Composition Scheme for Goods has been increased to Rs 1.5 crore.

Special category States must decide, within one week, about the Composition Limit in their respective States.

4 Compliance Simplification for Composition Scheme Dealers – One Annual Return  Presently, the taxpayers registered under Composition Scheme are required to file Quarterly Return in Form GSTR-4.

Now, they would need to file one Annual Return with Payment of Taxes to remain Quarterly (along with a simple declaration)

5 Composition Scheme to be extended to Supplier of Services (or Mixed Suppliers), besides Restaurant Service Providers Service providers (or mixed suppliers), besides restaurant service providers, with an Annual Turnover of up to Rs.50 lakhs shall be allowed to enroll for the Composition Scheme.

Such service providers shall pay GST @ 6% (3% CGST + 3% SGST) on the turnover.

Compliance simplification as recommended in point no. 4 above shall apply to such service providers as well.

All of the above recommendations shall be made operational from 1st April 2019
Other Recommendations by the GST Council
6 Free Accounting and Billing Software shall be provided to Small Taxpayers by GSTN.
7 Levy of Cess on Intra-State Supply of Goods and Services within the State of Kerala at a rate not exceeding 1% for a maximum period of 2 years.
8 A seven Member Group of Ministers shall be constituted to examine the proposal of giving a Composition Scheme to Boost the Residential Segment of the Real Estate Sector.
9 A Group of Ministers shall be constituted to examine the GST rate structure on Lotteries.

A summarized table detailing the threshold limit of registration, composition scheme, applicable rate of taxes for composition scheme and availability of input tax credit has been provided below:

Type of Suppliers Turnover Registration Applicability Availability of Composition Scheme Applicable Rate of Tax for Composition Scheme ITC Availability
Supplier of Goods Up to Rs. 20 Lakhs or 40 Lakhs (as may be decided by the respective States)
> Rs. 20 Lakhs / 40 Lakhs but up to Rs. 1.5 crore 1% of the turnover
> Rs. 1.5 crore ITC available
Restaurant Service Providers Up to Rs. 20 Lakhs
> Rs. 20 Lakhs but up to Rs. 1.5 crore 5% of the turnover
> Rs. 1.5 crore
Other Supplier of Services (or Mixed Suppliers) Up to Rs. 20 Lakhs
> Rs. 20 Lakhs but up to 50 Lakhs 6% of the turnover
> Rs. 50 Lakhs ITC available

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One Comment

  1. Pawansgr says:

    Sir,

    Thanks for your article, i wanted to have the notification in this reference, or if it is not released yet then, when can we expect the notification from govt.?

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