Implementation of decisions taken in 32nd GST Council meeting from 1st April,2019

The GST Council in its 32nd Meeting held on 10th January, 2019, inter-alia, had taken the following decisions to be effective from 1st April, 2019 (01.04.2019):

a) Higher Exemption Threshold Limit for Supplier of Goods (Notification No. 10/2019 - Central Tax, dated the 7th of March, 2019) : There would be two Threshold Limits for exemption from registration and payment of GST for the Suppliers of Goods i.e. Rs. 40 lakhs and Rs. 20 lakhs. States would have an option to decide about one of the limits. The Threshold for Registration for Service Providers would continue to be Rs. 20 lakhs and in case of Special Category States Rs. 10 lakhs.

Author’s comments: In case a person is engaged in supply of both goods and services, the threshold limit of aggregate turnover for registration is INR 20 lakhs. Individual threshold limits for goods (i.e. INR 20 lakhs) and services (i.e. INR 40 lakhs for services) are not applicable.

b) Composition Scheme for Services and Mixed Suppliers (Notification No. 02/2019 - Central Tax (Rate), dated the 7th of March, 2019): Composition Scheme is now made available for Suppliers of Services or Mixed Suppliers (having an Annual Turnover in preceding Financial Year upto Rs 50 lakhs) with a tax rate of 6% (3% CGST + 3% SGST).

Author’s comments:. This amendment can be coined as a welcoming move as the level of compliance for small service providers would substantially reduce.

c) Increase in Turnover Limit for the Existing Composition Scheme (Notification No. 14/2019 – Central Tax, dated the 7th of March, 2019): The Limit of Annual Turnover in the preceding Financial Year for availing Composition Scheme for Goods shall be increased to Rs. 1.5 crore. Special Category States would decide about the Composition Limit in their respective States.

Author’s comments:. This amendment provides relief to the small taxpayers, in a substantial way, from the compliance perspective – e.g. quarterly returns in place of monthly returns and would benefit the small taxpayers in terms of ease of doing business.

All the above Notifications shall come into effect from 1st April 2019.

Note: The above update is solely for the purpose of information purpose.

The authors can be reached at cajagadeeshwar@gmail.com or aravind.penugonda1@gmail.com