32nd GST Council Meeting

The 32nd GST Council Meeting was held on 10th January 2019 at New Delhi. The decision taken in this meeting with respect to GST turnover limit and composition scheme changes would be effective from 1st April 2019. In the meeting, the Government took steps to provide compliance relief to small businesses by providing various concessions as discussed in this article.

GST Turnover Limit Increased

The Central Government has decided to provide two threshold limit for

GST registration for suppliers of goods, Rs.20 lakhs and Rs.40 lakhs. However, each of the individual State Governments must decide on the threshold limit within a week as the State's revenue is also tied to GST. This decision will now lead to various States having different GST threshold limits overtime. Service providers will continue to be required to register for GST once they cross a turnover of Rs.20 lakhs and in case of Special Category States at Rs 10 lakhs. Know more about GST turnover limit.

Composition Scheme Simplified

The Government has given a thrust to the GST Composition Scheme with the following three changes:

Increase in Turnover Limit

The limit of Annual Turnover in the preceding Financial Year for availing Composition Scheme for Goods has been increased to Rs 1.5 crore. Special category States must decide, within one week, about the Composition Limit in their respective States.

Yearly Return

Persons enrolled under the Composition Scheme were earlier required to

file GSTR-4 return every quarter. Now, persons enrolled under the Composition Scheme can one file annual return but must make quarterly payment of taxes due.

Service Providers Eligible

Service providers with a turnover of less than Rs.50 lakhs are also now made eligible to enrol for the Composition Scheme. Such service providers would have to pay GST at the rate of 6% (3% CGST +3% SGST) of turnover. Its important to note that those enrolled under Composition Scheme are not eligible to claim

input tax credit.

Free Accounting Software

The Government has also decided to provide a free accounting and billing software for small taxpayers to enable easier GST compliance.

(LEDGERS GST Software)

GST Cess

Finally, the GST Council approved levy of

Cess on Intra-State Supply of Goods and Services within the State of Kerala at a rate not of not more than 1% for a period not exceeding 2 years. This will be used as revenue mobilization for supporting the natural calamity.

Relief for Real Estate Sector

The GST Council has also decided to create a seven Member Group of Ministers to examine the proposal of giving a Composition Scheme to Boost the Residential Segment of the Real Estate Sector.

Government Press Release

The Government press release about the 32nd GST Council Meeting is attached below for reference:

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Frequently Asked Questions

Common questions about 32nd GST Council Meeting Overview: Key Reforms & Decisions.

The Central Government has decided to provide two threshold limits for GST registration for suppliers of goods - Rs. 20 lakhs and Rs. 40 lakhs. However, each State Government has to decide on the applicable limit within their state within a week, as their revenue is also tied to GST. This decision will lead to different GST threshold limits across states over time.

The Composition Scheme has been simplified in three ways - (i) The annual turnover limit for availing the scheme for goods has been increased to Rs. 1.5 crore (subject to State's decision), (ii) Composition taxpayers can now file one annual return instead of quarterly returns, though tax payments have to be made quarterly, and (iii) Service providers with turnover less than Rs. 50 lakhs are now eligible to opt for the Composition Scheme by paying GST at 6%.

The Government has decided to provide free accounting and billing software (LEDGERS GST Software) to small taxpayers to enable easier GST compliance.

The GST Council has approved the levy of Cess on intra-state supply of goods and services within Kerala at a rate not exceeding 1% for a maximum period of 2 years. This is aimed at revenue mobilization to support the state after the natural calamity.

The GST Council has decided to constitute a seven-member Group of Ministers to examine the proposal of providing a Composition Scheme to boost the residential segment of the real estate sector.

The changes in GST turnover limit and Composition Scheme were introduced to provide compliance relief to small businesses by giving them various concessions and simplifying the GST regime for them.

The decisions taken in the 32nd GST Council Meeting with respect to GST turnover limit and changes to the Composition Scheme will be effective from April 1, 2019.

Service providers with an annual turnover of less than Rs. 50 lakhs will now be eligible to opt for the Composition Scheme and pay GST at a rate of 6% (3% CGST + 3% SGST) on their turnover.

The major condition for opting for the Composition Scheme is that businesses enrolled under it will not be eligible to claim input tax credit.

Earlier, persons enrolled under the Composition Scheme were required to file the GSTR-4 return every quarter. Now, they can file a single annual return, though the tax payments will still have to be made quarterly.