New Delhi : The Goods and Services Tax (GST) Council on Thursday (January 10) doled out a few benefits to medium and small-scale enterprises (MSMEs) with regards to GST exemption and approved 6 per cent composition scheme for the services sector.
There will be two exemption limits: Rs 40 lakh will apply to major states while the same has been capped at Rs 20 lakh for hilly states including those in the northeast.
Addressing a press conference after the 32nd GST Council meet, Finance Minister Arun Jaitley declared that the services sector will now be eligible for benefits under the composition scheme, which was only applicable to manufacturers and traders earlier.
The composition rate for services sector has been fixed at 6 per cent while the composition limit has been set at Rs 50 lakh.
The finance minister further announced that the limit of the composition scheme has been hiked to Rs 1.5 crore.
Those who fall under the composition scheme or choose to avail it will have to pay tax on a quarterly basis while only one return has to be filed during a year.
"From April 1, 2019, the composition scheme limit will be increased to 1.5 crores. Those who come under the composition scheme will pay tax quarterly, but the return will be filed only once a year. Council approved composition scheme for Services," Jaitley said.
Meanwhile, the Council is yet to tke a call on the real estate sector. Jaitley said that a 7-member GoM has been constituted to discuss ways to tackle issues in the ailing sector.
The Council also approved recommendations pertaining to calamity cess in Kerala. The state government will now levy 1 per cent calamity cess for a period of two years on products and services to fund rehabilitation in the state.
Likewise, any state which encounters a natural disaster may approach the GST Council to demand a similar solution.
When asked whether there will be further rationalisation of GST slabs or tax rates, Jaitley said further rate cuts can be discussed only when there is a rise in revenue collection.