The decision of the GST Council to raise exemption threshold and increase in Composition Scheme limit will help small and medium enterprises (SMEs) significantly, The Synthetic & Rayon Textiles Export Promotion Council (SRTEPC) has said. For hilly states and those in North East, the exemption threshold has been doubled to ?20 lakh from the earlier ?10 lakh.
At its 32nd meeting, the GST Council has “taken encouraging decisions” by relaxing the tax exemption limit to ?40 lakh of annual turnover from the earlier cap of ?20 lakh and increasing the composition scheme (without input tax credit and no recovery of taxes on output liability) limit to ?1.5 crore from present ?1 crore, SRTEPC said in a press release.
“By expanding the Composition Scheme, the government is helping the small players under the SMEs segment who are not in a position to file returns in time, which was expected by them since long,” said SRTEPC chairman Narain Aggarwal.
The GST Council also took other industry friendly decisions. Those providing services or mixed supplies (goods and services) with a turnover up to ?50 lakh will now be entitled to avail composition scheme.
Secondly, service providers and those who render mixed supplies of goods and services with a turnover up to ?50 lakh in the informal sector will be entitled to the composition scheme under the GST regime. The composition rate for services has been put at 6 per cent.
Moreover, composition tax payers will pay tax quarterly, but file returns annually.
“These exemptions and relaxations will certainly facilitate ease of doing business and smooth functioning of the SMEs. This will also encourage SRTEPC members in their efforts to increase exports of Indian MMF textiles,” Aggarwal said.