NEW DELHI: On Thursday in a big boost to the small businesses, Union finance minister Arun Jaitley said that 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.
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. Also, service providers and suppliers of both goods and services up to a turnover of Rs 50 lakh would be eligible to opt for the GST composition scheme and pay a tax of 6 per cent. The GST council is headed by the finance minister.
The twin decision under the composition scheme would have an annual revenue impact of about Rs 3,000 crore. Jaitley further stated that the small companies would have the option to opt out of the GST tax net.
Under the composition scheme, traders and manufacturers can pay taxes at a concessional rate of 1 per cent, while restaurants pay 5 per cent GST.