Businesses with Annual turnover of up to Rs 40 lakh now GST Exempt
The Ministry of Finance has made an important announcement on Thursday 24th of August, 2020 regarding some important aspects related to GST. Following are the highlights of the announcements.
Exemption limit for GST hiked to Rs 40 lakh from Rs 20 lakh
In a "massive relief" to small businesses , the GST Council Thursday doubled the limit for exemption from payment of goods and services tax (GST) to Rs 40 lakh (only for Manufacturing of Goods) and announced that the higher turnover cap of Rs 1.5 crore for availing composition scheme of paying 1 per cent tax. The increased (exemption) limit (of Rs 40 lakh) is applicable for those businesses who deal in goods
Government notifies 1 per cent GST for manufacturers under composition scheme
The government has notified lower 1 per cent GST rates for manufacturers who have opted for composition scheme as well as easier norms for traders opting for it.
The notification stipulates that manufacturers who have opted for composition scheme will now have to pay 1 per cent Goods and Services Tax (GST) as against 2 per cent earlier.
Besides, traders opting for composition scheme would now have to pay the tax at 1 per cent on their turnover of taxable supplies. So far, they were paying GST on total turnover, which included turnover from exempt supplies like fruits, vegetables.
Over 15 lakh businesses opted for composition scheme, which allows them to pay taxes at a concessional rate and makes compliance easy under the Goods and Services Tax (GST)
Tax Rates brought down: 28\\% tax only on luxury items
The Ministry noted that after the implementation of GST, the tax rate on a large number of items was brought down. The Ministry informed that at present, the 28\\% GST tax slab includes mostly sin and luxury items. Out of the total 230 items included in the 28\\% tax slab earlier, around 200 items have been shifted to lower slabs.
GST on Affordable housing reduced to 1\\%
The Ministry further tweeted saying that significant relief was extended to the construction sector, especially the housing sector. The housing sector has now been placed at the 5\\% tax rate. Besides this, GST on affordable housing has been brought down to 1 percent.