The GST Council has almost agreed to increase the revenue threshold for availing the benefit of the composition scheme to Rs 1 crore from the present Rs 75 lakh, Uttarakhand Finance Minister Prakash Pant, said today on the sidelines of a crucial review meeting.
The GST Council has almost agreed to increase the revenue threshold for availing the benefit of the composition scheme to Rs 1 crore from the present Rs 75 lakh, Uttarakhand Finance Minister Prakash Pant, said today on the sidelines of a crucial review meeting, ahead of a formal briefing. The council is almost in agreement on increasing the limit under the composition scheme to Rs 1 crore from Rs 75 lakh, as all the states have said the same, Prakash Pant told reporters outside the meeting venue in Hindi, adding that the final decision on it will be taken today itself.
This will bring big relief to many more small businesses, who will have the convenience of paying a flat rate of 1%, 2% or 5%, and avoid a lot of paperwork. Albeit, this might also come as a disappointment to many, as it was being widely speculated that the limit would be raised to Rs 1.5 crore in today’s meeting.
As the 22nd meeting of the GST Council is underway in New Delhi today. The meeting is third since the implementation of the Goods and Services Tax in July this year. The council, headed by Finance Minister Arun Jaitley, is likely to provide wide ranging relief to consumers and business owners alike by taking measures to simplify processes, reduce compliance burden and recalibrate tax rates.
The council is expected to heed the call by small businesses to lower the compliance burden by allowing them to file returns only once in a quarter instead of once every month as is required at present. Further, for exporters reeling under tight liquidity conditions due to tax refund claims aggregating to Rs 65,000 crore stuck with the government, the GST Council may take immediate steps to speed up the refunds or relax the working capital requirements, in addition to introducing e-wallet facility as well.
In other measures to further simplify the compliance requirements, the GST Council may also approve suspension of reverse charge till March 31, CNBC TV18 reported earlier today citing unidentified sources. Reverse charge mechanism shifts the liability to pay the tax on the buyer rather than the seller. Under this mechanism, large companies are required to deduct taxes while sourcing goods from MSMEs to pay to government. But MSMEs tend to lose out on business since the large companies do not want to buy from them to avoid additional compliance burden.