GST exemption raised to Rs 40 lakhs

The limit for GST compliance has been raised to Rs 40 lakh

The NDA government has given a major sop to tax payers by doubling the exemption limit for GST payment and compliance from Rs 20 lakhs per year to Rs 40 lakh.

Under the earlier law, people and establishment providing goods and services worth more than Rs 20 lakh had to get registered and comply with onerous filing requirements.

Those who render services, or mixed supply up to Rs 50 lakhs will be entitled to a composition rate of 6%, Finance Minister Arun Jaitley said.

Composition scheme refers to an option of filing taxes without taking into account input taxes and other complicated calculations.

Around 20 lakh taxpayers will be eligible for benefit under the new relaxed limit.

North Eastern and hill states were given Rs 10 lakhs exemption, but this was later increased to 20 lakh.

Under the new rules too, there will be two tiers of exemption limits.

The first one will have an upper limit of Rs 40 lakh. The second, in line with the existing structure, will be for hill states and North Eastern states and will be at Rs 20 lakh.

Kerala has been allowed to impose a maximum cess of 1% for a maximum period of 2 years. It would be imposed only on transactions within the state.

This has been done to help the state with the recent floods.

On the topic of GST on real estate, the matter has been referred to a group of seven ministers.

Similarly, there will another GoM on lottery services.

Jaitley said further reductions in tax rates will be considered only if tax revenue goes up.