The 32nd GST Council Meeting took place in New Delhi on 10th January, 2019. It was held under the Chairmanship of Union Minister of Finance & Corporate Affairs, Shri Arun Jaitley. Following major decisions were taken to provide relief to MSMEs, including small traders.
1. GST Registration Threshold For Supplier Of Goods
The GST exemption turnover limit for supplier of goods was Rs. 20 lakhs under the original GST structure envisaged by government in July 2017. This exemption limit, however, has been doubled by the GST Council, from Rs. 20 lakhs to 40 lakhs. Also, the GST exemption limit for north eastern and hilly states was Rs. 10 lakhs under the previous GST regime. This too has been raised, from Rs. 10 lakhs to Rs. 20 lakhs for supply of goods, in the current council meeting. Additionally, the hilly and north eastern states have been given an option to choose either Rs. 20 lakhs or Rs. 40 lakhs as the turnover limit for GST exemption for supplier of goods within a week’s time. They are required to intimate the changes undertaken to the Secretariat.
The GST exemption limit for service providers remains unchanged i.e. Rs. 20 lakhs and Rs 10 lakhs for special category states
2. Turnover Limit For Existing Composition Scheme Increased
To avail composition scheme, the threshold for annual turnover to avail Composition Scheme in case of supply of goods was Rs. 1 crore under the original GST structure. This annual turnover limit for supply of goods has been increased from Rs. 1 crore to Rs. 1.5 crores with effect from 1st April, 2019. However, the Special category States would decide about the Composition Limit within one week and intimate the respective changes to the Secretariat accordingly.
Moreover, a dealer under the Composition Scheme was required to file quarterly return and an annual return as per the original GST structure.
However, such compliance under Composition Scheme has now been simplified. Accordingly, the dealer would need to file one annual return only. But the payment of taxes would remain quarterly along with a simple declaration, with effect from 1st April, 2019.
3. New Composition Scheme For Service Providers
Service providers, other than restaurant related services, could not opt for Composition Scheme under the original GST framework. However, a new Composition Scheme shall now be available for Suppliers of Services or Mixed Suppliers with a Tax Rate of 6% (3% CGST +3% SGST). And the threshold annual turnover for these service providers in the preceding Financial Year must be up to Rs 50 lakhs.
Moreover, such service providers would be liable to file one annual return with quarterly payment of taxes through a simple declaration with effect from April 1, 2019.
4. Kerala Allowed Cess To Cope With Natural Calamity
Kerala is now authorized by the GST council to levy a maximum of 1% cess, up to a maximum of two years on intra – state sales i.e. sales within the Kerala state.
5. Other Matters Still Under Discussion By GST Council
– The under – construction properties and ready to move in flats where completion certificate has not been issued at the time of sale, attracted 12% GST under the original GST framework. The Council was likely to consider lowering GST on under – construction flats from 12% to 5% in the 32nd GST Council meeting. However, owing to the diverse opinions of states on real estate, no decision has been taken as of now. Instead, a seven member group of ministers has been constituted to look into the matter and give its recommendations in the next meeting.
- A Group Of Ministers shall also be constituted to study the GST rate structure on lotteries.
- The GST Council is not considering further rate cuts as of now, until it sees a revenue increase.
6. Free Accounting Software For Small Taxpayers
The GST Council proposed to give free accounting software to small taxpayers by GSTN.
7. Recommendations Made By The GST Council
- The Last Date for passing the examination for GST Practitioners to be extended till 31.12.2019. This is for those GST Practitioners who have enrolled under rule 83(1)(b) i.e. who were sales tax practitioner or tax return preparer under the existing law for a period of not less than five years.
- Changes made to the following acts, rules, notifications and circulars would be notified with effect from 01.02.2019:
- CGST (Amendment) Act,2018,
- IGST (Amendment) Act, 2018,
- GST (Compensation to States) Amendment Act, 2018
- UTGST (Amendment) Act, 2018 and
- Amendments in CGST Rules, notifications and Circulars issued earlier and the Corresponding Changes in SGST Acts