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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.
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Textiles Export Promotion Council (TEXPROCIL) has welcomed the steps taken by the government to increase GST exemption and Composition Scheme threshold limits.
Welcoming the decision, Chairman of The Cotton TEXPROCIL, Dr. K.V. Srinivasan said, “This decision will help the small and medium sized businesses and will encourage growth in the textiles sector”.
“The expansion of the Composition Scheme has come as relief to a large number of small tax payers who are not in a position to file returns on time”, according to the Chairman, TEXPROCIL.
The 32nd meeting of the GST Council held on January 10, 2019 has raised the GST exemption threshold limit from Rs.20 lakhs to 40 lakhs effective from April 1, 2019.
For the North Eastern states, the threshold has been doubled to Rs 20 lakh from Rs. 10 lakhs.
Srinivasan thanked the Prime Minister, Narendra Modi and the Finance Minister, Arun Jaitley for these two very important decisions which will have a positive impact on the overall economy of the country.
The GST Council has also raised the existing Composition Scheme turnover threshold from Rs. 1 crore to Rs 1.5 crore effective from April 1, 2019.
Businesses under the scheme will now pay tax on a quarterly basis but returns will have to be filed annually
Vietnam will achieve garment and textile export turnovers of 40 billion U.S. dollars this year, up 10.8 percent from last year, the Vietnam Textile and Apparel Association said on Friday.
To this end, Vietnam is focusing on producing items with high competitiveness in the world market, and improving its garment and textile supply chain, the association said, noting that increasing local and foreign investments are pouring into the Vietnamese weaving, dyeing, material and accessory segments.
Vietnam, the world’s third biggest garment and textile exporter, earned over 36 billion U.S. dollars from exporting garments and textiles, including T-shirts, jackets and dresses in 2018, up more than 16 percent from 2017, said the association. Its main export markets included the ASEAN, Japan, South Korea, the European Union and the United States.
However, Vietnam had to spend over 3 billion U.S. dollars importing cotton, 2.4 billion U.S. dollars on yarn, 12.9 billion U.S. dollars on fabric, and more than 5.7 billion U.S. dollars importing materials and accessories for production of garments, textiles and footwear, according to the General Statistics Office.
Technical textiles for all applications and a wide range of textile technologies will be on show from 14-17 May 2019, when Techtextil brings together more exhibitors from even more countries than before. Around four months before it opens its doors, Techtextil is almost fully booked, exceeding once again booking levels for the previous event at the same time of year. With its trend theme, Urban Living – City of the Future, the leading international trade fair also takes a look ahead to see how technical textiles will shape urban life in the future
Every two years, Techtextil mirrors the range of applications for textile materials. Leading international experts from the most diverse industries – be they from architecture, the automotive industry, medicine, the fashion industry or personal protection – come together at Techtextil in search of lightweight, durable and sustainable materials,” said Olaf Schmidt, Vice President Textiles and Textile Technologies, Messe Frankfurt. The suppliers at Techtextil represent the complete spectrum of technical textiles and nonwovens. There is a significant increase in the number of suppliers in the fields of technology, as well as fibres and yarns. Suppliers of woven fabrics, coated textiles and functional apparel textiles are also strongly represented.
Textile solutions for life in the city of the future
In collaboration with Creative Holland, the Dutch creative industries, Techtextil is dedicating an exhibition space to life in the city of the future with the Urban Living – City of the Future special event. According to the United Nations, nearly 70% of all people are expected to be living in metropolises and megacities by 2050. This poses new challenges for living and mobility concepts, as well as food supplies and health services provision.
Functional apparel, with smart functions for example, could also play an even more important role in people’s everyday lives in the future. The Techtextil and Texprocess exhibition area will be presenting examples of textile applications. In addition, an accompanying complementary programme will offer insights into the industry.
Open platform for exchange
On all four days, the trade fair will offer a new format of lectures, discussions and interactive sessions with the Techtextil Forum. The forum, which replaces the Techtextil Symposium, will take place directly in exhibition Hall 4.1 and all Techtextil participants will be able to access it free of charge. Trade visitors can look forward to contributions in the following thematic areas: sustainability, digital transformation, smart textiles, urban textiles, composites, and technical textiles in medical technology. In addition, both the Dornbirn Global Fiber Congress (GFC) and the textiles competence centre at the General Association of the German Textile and Fashion Industry are organising a thematic block.
LAS VEGAS – Smart textile developer Myant Inc., has announced the development of the world’s first cuffless blood pressure monitoring technology inside its SKIIN Textile Computing Platform.
Myant’s SKIIN Textile Computing platform integrates innovative sensor and actuator technology into fabrics, including, the company says, the world’s first smart garment that delivers continuous, cuffless blood pressure monitoring in a comfortable and machine-washable knitted polo shirt.
According to Myant, which opened a Digital Textile Factory with Stoll in 2018, a collaboration that is to aiming to help commercialize the smart textile industry, SKIIN Smart Shirt eliminates the hassle of regular blood pressure monitoring and adds automatic data tracking to share data and trends with clinicians.
The company is now aiming to release both its SKIIN Smart Underwear for heart health detection (with ECG, HRV, activity, sleep and temperature monitoring) and its SKIIN Smart Shirt with continuous blood pressure monitoring this year. Planned additions to the SKIIN platform include slip and fall detection, driver fatigue, ovulation and a suite of chemical sensing markers. The result is smart clothing that enables users to proactively manage their health, stay connected and lead longer and more comfortable lives, the company says.
Tony Chahine, CEO and founder of Myant Inc., explained: “Myant’s vision is to build a new platform for human-computer interaction that helps individuals manage and anticipate their health and wellness 24 hours a day, across all life stages. “The addition of cuffless blood pressure monitoring to our SKIIN Textile Computing platform is a major step forward in empowering continuous monitoring in a comfortable garment.”
Founded in 2010, Toronto-based Myant Inc. is creating the world’s first Textile Computing platform that connects humans to the world around them through textile-based solutions. In 2018, Myant’s latest developments were unveiled at this week’s consumer tech exhibition CES in Las Vegas.
The Centre’s move to allow companies under composition scheme to file GST returns annually will improve ease of doing business for small textile companies, according to the Cotton Textiles Export Promotion Council.
The GST Council on Thursday raised the existing Composition Scheme turnover threshold from Rs. 1 crore to Rs. 1.5 crore effective from April 1.
Companies under the scheme will now pay tax on a quarterly basis but returns will have to be filed annually, said KV Srinivasan, Chairman, Texprocil. The expansion of the Composition Scheme has come as relief to a large number of small tax payers who are not in a position to file returns on time, he added.
The increase in GST exemption threshold limit
will help small and medium-sized businesses and will encourage growth in the struggling textiles sector, he said.
The assistance for the entire value chain starts where the previous textile policy left off
The Gujarat government on Thursday announced the much-awaited support scheme spanning the entire textile value chain.
With incentives in the form of interests/power tariff subsidy, the new scheme will also provide assistance in a variety of areas such as technology upgradation, environmental compliance cost and for textile parks.
Named ‘Scheme for Assistance to Strengthen Specific Sectors in the Textile Value Chain’, the scheme will be operative from September 4, 2018 to December 31, 2023.
An official statement issued on Thursday said: “The government analysed the existence of all segments in the textile value chain and identified gaps in certain segments. After careful consideration, the government has decided to come out with a new scheme to strengthen the value chain and extend support to textile industry in the State.”
Local employment
Aimed at creating local employment, the scheme requires at least 85 per cent of the total manpower of an enterprise and at least 60 per cent of supervisory and managerial staff to be domiciled in Gujarat.
The previous Gujarat Textile Policy 2012 which was operational till September 3, 2018, proved successful in terms of investment and employment generation in ginning, spinning and technical textiles, it said.
The scheme comes at a time when the State’s textile industry is facing tough challenge from textile hubs in Telangana, Andhra Pradesh and Maharashtra.
Segments covered
The segments covered under the scheme include weaving, knitting, dyeing/printing, machine carpeting, technical textile, made-ups, composite units and other activities in the textile value chain such as embroidery, winding, sizing twisting and crimping.
The scheme provides financial assistance through credit-linked interest subsidy of 6 per cent for MSME and 4-6 per cent for large enterprises with an upper ceiling of Rs. 20 crore per annum. A separate scheme for subsidy in power tariff allows up to Rs. 3 per unit for weaving and Rs. 2 per unit for other eligible segments. The eligibility period for these benefits is five years.
The scheme for assistance in compliance of energy, water and environment conservation covers all existing units in operation for more than three years. The scheme provides 20 per cent assistance on the cost of machinery with a ceiling of Rs. 30 lakh and 50 per cent assistance for audit fees with a limit of Rs. 1 lakh. The benefits can be availed once in two years during the operative period of the scheme.
For technology upgradation and modernisation in textile value chain, the scheme provides one-time financial assistance of up to 50 per cent of the cost with a limit of Rs. 25 lakh.
The State government has also extended support for setting up textile parks with financial assistance of up to 25 per cent of capital expenditure on common facilities and infrastructure with a limit of Rs. 15 crore. The park will also get financial assistance to create hostel facilities within park with minimum 100 workers domiciled in Gujarat.
The developer of Park will get complete reimbursement of stamp duty paid on purchase of land required for the new Park.
Threshold limit for mandatory registration of suppliers of goods doubled to Rs. 40 lakh
Small businesses can breathe easy now as the Goods and Services Tax (GST) Council has decided to double the basic threshold limit for goods suppliers.
However, the Council, which took a slew of decisions on Thursday, could not arrive at a consensus on lowering the levy on under-construction flats.
The 32nd meeting of the Council, chaired by Finance Minister Arun Jaitley, decided to raise the basic threshold limit for suppliers of goods (for mandatory GST registration) to Rs. 40 lakh from the current Rs. 20 lakh. Also, some of the north-eastern and hilly states will have a new limit of Rs. 20 lakh from Rs. 10 lakh earlier. However, there is no change in the limit for services. The threshold for registration of service providers would continue to be Rs. 20 lakh, and in case of special category States, Rs. 10 lakh.
‘States can fix threshold’
“The States will have the freedom to change the threshold,” Finance Minister Arun Jaitley told reporters after the meeting. Any State, which would like to exercise the freedom, has to inform the Council’s Secretariat within one week. Jaitley said that this will be a one-time concession.
Stating that there will be notional revenue loss, Jaitley added that over 20 lakh assesses could go out of the GST net.
Archit Gupta, Founder & CEO of ClearTax, said that increasing the basic registration threshold will benefit small businesses as it will reduce their compliance cost and efforts. However, suppliers selling to other businesses must continue with full compliance if they want to pass on the input tax credit benefit to their buyers, he said. “Service providers will be relieved with the composition scheme; even though the rate is higher, their compliance cost will go down significantly,” he added. The Council also decided on the new structure for the composition scheme that will come into effect from April 1, 2019. Trading, manufacturing and restaurant businesses with annual turnover of Rs. 1.5 crore can be part of the scheme. Though the tax rates will be same at one per cent (trading and manufacturing) and five per cent (restaurants), such businesses will now be required to file returns annually and not quarterly. But taxes should be paid quarterly along with a simple declaration.
Special composition scheme
The Council also decided to bring in a special composition scheme for small services providers. Any such providers with an annual turnover of up to Rs. 50 lakh will be eligible. Here, the GST rate would be 6 per cent. The scheme will also cover mixed suppliers such as electricians and plumbers.
Two million additional micro, small and medium enterprises (MSMEs) in India will become eligible to opt out of the goods and services tax (GST) system from the beginning of the next financial year, the GST Council decided on Thursday.
The Council took a slew of measures for MSMEs by increasing the annual turnover threshold for exemption from GST registration to Rs 40 lakh from the current Rs 20 lakh, introducing a composition scheme for services, easing return filing procedures, and raising the composition threshold for traders and manufacturers. However, for services providers, the threshold remains the same at Rs 20 lakh.
The revenue impact of this move is estimated to be more than Rs 6,000 crore on an annual basis.
The Council permitted Kerala to impose the calamity cess of up to 1 per cent for a maximum period of two years, Union Finance Minister Arun Jaitley told reporters after the meeting.
However, it referred the much-awaited decision on reducing the GST rate on under-construction property and lotteries to two groups of ministers (GoMs).
There was no decision on cutting the 28 per cent rate on cement. Jaitley said, “Any decision on cutting GST rates on individual items will be taken only when revenues improve.”
For the Northeast and hilly states, the threshold will be raised from the current Rs 10 lakh to Rs 20 lakh on April 1. But, they will have an option to “move up” to the Rs 40 lakh threshold.
Prime Minister Narendra Modi had expressed a view that the threshold needed to be increased to Rs 75 lakh.
“Increasing the threshold to Rs 40 lakh instead of Rs 75 lakh as speculated is better because while we need to provide relief to small taxpayers, it is equally important to expand the tax base,” said Pratik Jain, partner, indirect tax, PwC India. The decision is likely to have been taken on the basis of the data that only 1.1 million of the roughly 5 million GST filers below a turnover of Rs 20 lakh pay the GST, contributing only 1.5 per cent of overall GST collection.
Companies with a turnover of Rs 20-40 lakh form 20 per cent of GST filers and contribute less than 3 per cent of overall collection, officials told Business Standard.
“Of the GST filers with a turnover of Rs 20-40 lakh, only those whose cost of compliance is higher than the tax they pay will opt out. Most of them are likely to stay in the system owing to the availability of input tax credit,” Revenue Secretary Ajay Bhushan Pandey said.
In a first, a composition scheme was introduced for small service providers with a turnover of up to Rs 50 lakh per year, with a GST rate of 6 per cent (3 per cent each to the Central and State GST).
Experts said while such a scheme would be beneficial for companies providing electrical and other household services, businesses such as beauty parlours, whose rental cost is high, would not opt to save the available input-tax credit.
“For services providers, keeping a limit of Rs 50 lakh for registering under the composition scheme and increasing the exemption threshold to Rs 40 lakh at the same time do not make much sense for those having a high ITC (input tax credit) available at their disposal,” said Abhishek Rastogi, partner of Khaitan & Co.
For goods dealers, the upper limit of turnover to become eligible for the composition scheme will be increased to Rs 1.5 crore from the next financial year. This will not be available for dealers involved in inter-state trade. Further, composition dealers will need to file GST returns only annually, but pay tax quarterly, from 2019-20.
On revenue mobilisation for post-disaster rehabilitation, the GST Council accepted the recommendations of the ministerial panel headed by Bihar Deputy Chief Minister Sushil Modi, and allowed Kerala to impose a calamity cess of up to a maximum of 1 per cent on the value of goods and services up to a maximum of two years.
Threshold for businesses in most States doubled to Rs. 40 lakh; small firms allowed to file annual returns
The GST Council in its 32nd meeting on Thursday — the last before the Budget — took a slew of decisions aimed at reducing the tax and compliance burden on small and medium enterprises, including increasing the threshold limit below which companies are exempt from GST, extending the Composition Scheme to small service providers, and allowing small companies to file annual returns.
The Council also raised the annual turnover limit under which companies would be exempt from GST to Rs. 40 lakh for most States and Rs. 20 lakh for the North Eastern and hill states, from the earlier limit of Rs. 20 lakh and Rs. 10 lakh, respectively.
“A very large part of GST revenue comes from the formal sector and large companies,” Finance Minister Arun Jaitley said at a press conference. “The decisions taken today by the GST Council have been done to help the small and medium companies. The revenue impact due to these will be minimal.”
“Increasing the threshold limit [in general] from Rs. 20 lakh to Rs. 40 lakh is a welcome relaxation from the GST Council and should benefit a large number of taxpayers,” Pratik Jain, Partner and Leader Indirect Tax, PwC India, said. “Also, increasing the threshold to Rs. 40 lakh instead of Rs. 75 lakh [as speculated] is better because while we need to provide relief to small taxpayers, it is equally important to expand the tax base.”
Mr. Jaitley announced that the limit for eligibility for the Composition Scheme would be raised to an annual turnover of Rs. 1.5 crore from April 1, 2019. He added that companies opting for the Composition Scheme would be allowed to file annual returns and pay taxes quarterly from April 1.
The Composition Scheme currently allows companies with an annual turnover of up to Rs. 1 crore to opt for it, and file returns on a quarterly basis at a nominal rate of 1%. So far, only manufacturers and traders were eligible for this scheme.
Mr. Jaitley said that the Council had decided to extend the Composition Scheme to small service providers with an annual turnover of up to Rs. 50 lakh, at a tax rate of 6%.
“The option of composition scheme for small service providers is quite a welcome one,” Abhishek Jain, Tax Partner, EY India said. “Further, allowing a quarterly payment and annual return should bring quite a lot of relief and ease of doing business for small service providers.”
The Confederation of All India Traders, in a statement, said that increasing the GST threshold limit would allow about 10 lakh traders to be exempt from the compliance burden of GST, and added that increasing the Composition Scheme limit would benefit about 20 lakh small businesses that fall between the annual turnover brackets of Rs. 1 crore and Rs. 1.5 crore.
Kerala cess
The GST Council also decided to allow Kerala to levy a cess of up to 1% for up to two years on intra-State supplies to help finance the disaster relief efforts following the recent floods in the state.
“Allowing disaster cess of 1% to be introduced in the State of Kerala on local supplies… may be an administrative issue for both businesses and government and this may set a precedence for other States to demand additional levy,” Mr. Jain added.
As there were diverse and differing opinions on the issues of taxing real estate and lotteries, the GST Council decided to set up to separate Groups of Ministers to look into the issue and present their assessments to the Council, Mr. Jaitley said.
