The Goods and Services Tax (GST) Council on Thursday decided to exempt businesses with a turnover of less than Rs 40 lakh from paying the GST, by doubling the earlier threshold. For the northeastern states, the threshold will be Rs 20 lakh.
The council also decided that businesses having an annual turnover up to Rs 1.5 crore can opt for to pay taxes under the Composition Scheme for Goods –which allows small taxpayers to get rid of tedious GST formalities and pay GST at a fixed rate of turnover. The earlier limit was Rs 1 crore.
While such businesses that are covered under the scheme would need to file one Annual Return, they would pay taxes in every quarter.
Businesses in the service sector would need to pay a tax of 6% (3% CGST +3% SGST) if they opt for Composition Scheme, which has set a turnover limit of Rs 50 lakh.
The decisions would have an impact on GST revenue.
The council also approved Kerala, a state recovering from floods, to levy a cess on Intra-State Supply of Goods and Services up to 1% for two years.