What is the news
The 32nd GST Council Meeting was held on 10th January 2019 at New Delhi.
Significance of the Meeting
After the introduction of GST, there were some compliances burdens on SSEs (Small Scale Enterprises) and taxpayers. They were not able to understand the complex structure, therefore the Government took steps to provide compliance relief to small businesses through various concessions. Many decisions were taken with respect to GST turnover limit and changes in the composition scheme would be effective from 1st April 2019.
Decisions taken in the Council Meeting
- Threshold limit for goods-The GST exemption threshold has been raised from Rs 20 lakh to Rs 40 lakh. For hilly states and those in the North East, the threshold has been doubled to Rs 20 lakh. This comes as a relief of mid-scale companies. The exemption limit is the threshold of annual turnover above which companies have to mandatorily register under the GST regime.
- States given powers-For choosing if they want to sustain the threshold exemption at Rs 20 Lakh or Rs 40 Lakh.
- Restructuring Composition limit-The limit of annual turnover in the preceding financial year for availing composition scheme for suppliers of goods shall be increased to Rs 1.5 crore. A composition scheme is being made available for suppliers of services and mixed supplies i.e. goods and services with a turnover up to Rs 50 lakhs in preceding financial year. The rate applicable for such supplies shall be 6% (3% CGST and 3% SGST).
- Quarterly payment and Annual Return- Taxpayers opting for Composition Scheme will be required to continue to pay tax quarterly but relief has been given by way of annual return filing along with a simple declaration.
- Committee for Real Estate- A committee consisting of 7 ministers shall be set up to consider a composition scheme that would be aimed at giving a boost to the residential segment of the real estate. Currently, the Goods and Services Tax (GST) is levied at 12 per cent on payments made for properties under under-construction or ready-to-move-in flats where completion certificate has not been issued at the time of sale. However, GST is not levied on sale of real estate properties for which completion certificate has been issued at the time of sale.
- Committee for Lotteries-A committee shall be set up to examine the tax structure that would be made applicable on lotteries.
- Calamity cess –A cess rate of 1% by Kerala state to be imposed on intra state sales for a period of 2 years.
The Impact of the Decisions –
- By registering companies under GST regime will not only make them avail to GST benefit but also increase their customer base.
- This will reduce the complication provision and empower people to take benefits.
- It will increase the revenue of the government in the long run.
- Formation of committee on the actionable claims like lottery and under construction properties will bring good news for consumer as well as for builder in future.
Since its introduction, GST is going through many hurdles in implementation. However, regular GST council meetings have proved helpful. By regular adjustments in rates and bringing various sectors under the GST, the country it will fully attain the title of ”one nation one tax”.