A ministerial panel under the GST Council has decided to hike the exemption threshold for Micro, Small and Medium Enterprises (MSMEs) beyond an annual turnover of Rs 20 lakh, a media report said.
The panel, headed by Minister of State for Finance Shiv Pratap Shukla, however, has not decided the new limit, leaving that decision to the GST Council, headed by finance minister Arun Jaitley, The Times of India reported.
Currently, businesses with an annual turnover of up to Rs 20 lakh are exempt from the Goods and Services Tax (GST).
Modi, who is a member of the panel on MSME relief, said the GoM was unanimous that the exemption limit for the MSMEs which are a supplier of goods should be increased but there was no unanimity among states. Hence, it was left to the GST Council to decide.
While Delhi suggested that the limit should be hiked to turnover of up to Rs 40 lakh, Bihar suggested it at Rs 50 lakh.
Another suggestion was to levy GST of Rs 5,000 for MSMEs with turnover between Rs 50 to Rs 60 lakhs, and Rs 10,000-15,000 GST for those businesses with turnover between Rs 60-75 lakhs
"Under the earlier excise duty regime, businesses with a turnover of up to Rs 1.5 crore were exempt. So it was felt that there was a need to give relief to the MSMEs under GST," Modi said.
Another ministerial panel has cleared the decks for levying state-specific calamity cess. The panel under Bihar deputy chief minister Sushil Modi approved a levy of 1 percent 'calamity cess' by Kerala for a period of two years to fund rehabilitation work in the state hit by floods.
The goods and services, which will attract the 1 percent cess, would be decided by Kerala, Modi said, adding that if any other state wants to levy the 'calamity cess' it has to approach the GST Council for approval.
Besides, the Group of Ministers under Modi has also suggested to the GST Council to allow states hit by natural calamity to borrow more than the permitted limit. The GST law provides for the levy of special taxes for a specified period to raise additional resources during any natural calamity or disaster.
While the GoM on MSME was constituted in August last year, the same for 'calamity cess' was set up in September.
The GST Council in its meeting on 10 January will discuss the recommendations of the two ministerial panels.
The Shukla-led GoM has also suggested to the Council to allow businesses with a turnover of up to Rs 1.5 crore to avail composition scheme, up from the current Rs 1 crore.
It also suggested that dealers under the composition schemes be allowed to file returns annually, even as they would continue to pay their taxes. Currently, composition scheme dealers file returns and pay taxes quarterly.
Also, it suggested that a composition scheme be extended to service providers with an annual turnover of up to Rs 50 lakh. Such service providers can pay GST at 5 per ent.
The GoM has also suggested that businesses with a turnover of up to Rs 1.5 crore be provided with a free accounting and billing software by the GST Network.
--With PTI inputs
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Updated Date: Jan 07, 2019 12:04:16 IST