In 32nd GST council meet on Thursday approved doubling of the exemption threshold under Goods and Services Tax (GST) regime to Rs 40 lakh along with raising the turnover limit under composition scheme to Rs 1.5 crore from current Rs 1 crore with effect from April 1.
The GST council also doubles the annual turnover threshold for GST registration, says FM Arun Jaitley. The exemption limit for MSMEs has been raised to Rs 40 lakh of annual turnover, says FM Arun Jaitley.
Government has given option to states to have the option to choose between the two exemption thresholds of Rs 20 lakh and Rs 40 lakh and will have to intimate their decision within a week.
Currently, businesses below annual turnover of Rs 20 lakh are exempted from paying GST. The proposal is to increase to increase this threshold for MSMEs. The Council may also bring small service suppliers under the composition scheme — an alternate method of taxation that allows small businesses with annual turnover up to Rs 1 crore to pay tax at a concessional rate as well as reduce the compliance cost.