GST is one of the faster-growing economy globally through which it is becoming a manufacturing hub. As the manufacturing activities are increasing we are witnessing expansion in foreign trade .i.e....
The GST with its launch impacted in both ways positive and negative . Well! This update will surely win your heart. After intense discussions, big relief to the small taxpayers have been brought in. Usually the tax‘s are doubled, but this time the exemption limit has been doubled. Yes! All the micro, small and medium enterprises can take a sigh of relief as the threshold limit which was 20 lakhs before has now enhanced to 40 lakhs and further the limit of composite scheme turnover has been increased from Rupees 1 crore to 1.5 Crore Rupees with effect from the 1st day of April .
GST update for Service provider
In case of certain service providers the threshold is unchanged it will continue to be the current Rs 20 lakh.
Lets dig it little deep for better understanding. The GST council in its 32nd meeting, for those who have opted for Composite scheme shall be required to pay the GST taxes quarterly and simply file the annual return in a single form. Well this scheme shall be applicable to service providers and suppliers of goods and services having turnover up to Rupees 50 lakhs , that too at the tax rate of 6%. Note that in composition scheme, traders and manufacturers pay taxes quarterly at a concessional rate of one per cent, while restaurants pay five per cent GST.
Now the option have been left over to the states to decide out of two exemption limits i. e. Rs 20 lakhs and Rs 40 lakhs including the fact that now the composition scheme registrants will also have an option of even moving out of the GST regime.
For Kerala, the council has taken up a thoughtful decision and allowed to levy the disaster cess on the intra-state supply of goods and services at a rate which shall not be greater than 1 per cent. However this tax can not be levied for more than 2 years. The intention behind this step is the revenue mobilization due to the after effect of flood affected areas in Kerala in last year.
The popular “opt up or opt down” phrase used by Mr. Arun Jatiley has actually space while adopting the new GST regime or composition scheme option. The composition scheme which will have effect from April 1 onwards for quarterly tax payment and only one annual return has taken off a lot of compliance burden from the SMEs.
GST Implication on Inter and Intra-state
However, very cleverly the increased (exemption) limit (of Rs 40 lakh) is applicable for those businesses who deal in goods and also do intra-state trade and not for those who do inter-state transactions.
This is not the end of the news from GST councils, certain rate cuts for under-construction residential properties to 5%, apart from this introduction of uniform tax rate for certain lotteries are also under discussions. You can expect our next blog and new updates in this regard. These topics are under discussion for the political reasons. Certain states are of the view that the new change introduced will weaken the base limit set up for the assesses.
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