On 24 August 2020, the Union Ministry of Finance announced that companies with an annual turnover of up to Rs 40 lakh will now be excluded from GST. The Ministry added that those with up to Rs 1.5 crore turnover will apply for the Composition Scheme and pay just 1 percent tax. Now firms with an annual turnover of up to Rs 40 lakh are exempted from GST. That cap was originally Rs 20 lakh. In addition, those with up to Rs 1.5 crore turnover will opt for the composition scheme and pay just 1 percent tax. Big Regulatory relief for SMEs Business Sector in India:
- Business with annual revenue of up to Rs 40 lakhs is now exempt from GST (Rs 20 lakhs was the earlier limit).
- Further businesses with turnover up to Rs 1.5 will now opt for the Composition Scheme and pay just 1 percent GST
Previously, only companies with annual revenue of Rs 20 lakh had been exempted from GST tax. The Finance Ministry made the announcement on the occasion of the former Finance Minister Arun Jaitley's first death anniversary, via a series of tweets.
The Ministry of Finance rendered regards to the late leader and recalled his enduring contribution to nation-building and the legacy he left behind as minister of Union finance during 2014-19. Through its tweets, the ministry acknowledged the crucial role that Arun Jaitley had played in introducing GST, which will go down in history as one of India's most important landmark tax reforms.
The Ministry of Finance reported that since the introduction of GST, the tax rate on a variety of items has been reduced, noting that "28% is almost exclusively confined to sin and luxury goods." Of a total of about 230 items in the 28 percent slab, approximately 200 items were moved to lower slabs, it said.
The Ministry of Finance also noted that the Center has provided significant support to the construction sector, particularly the housing sector, which has now reached the GST mark of 5 percent. It also said GST has been reduced to 1 percent on affordable housing.
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