Finance Ministry: GST exempt for Businesses with up to Rs. 40 lakh Annual Turnover

The Ministry of Finance announced that businesses with up to Rs. 40 lakh annual turnover is GST exempt while the ones with Rs. 1.5 crores can go for the Composition Scheme and pay only one percent tax.

It has been possible because of GST that the rate of tax people pay has reduced. The RNR (Revenue Neutral Rate) was earlier 15.3%, in contrast to which the rate of GST now is just 11.6% (as per RBI).

“It is now widely acknowledged that GST is both consumer and taxpayer-friendly. While the high tax rates of the pre-GST era acted as a disincentive to paying tax, the lower rates under GST helped to increase tax compliance,”

mentioned the Ministry.

“As we remember Arun Jaitley today, let us acknowledge the key role he played in the implementation of GST, which will go down in history as one of the most fundamental landmark reforms in Indian taxation,”

was tweeted.

It was because of GST that the tax rate of a lot of items came down. The 28% tax rate is now solely restricted to sin and luxury items and out of a total of 230 items belonging to the 23% slab, almost 200 items have been shifted to the lower ones. In addition, the housing sector that was a part of the 5% slab while the rate of GST has now been reduced to 1%.

The Ministry also stated, “All processes in GST have been fully automated. Till now 50 crore returns have been filed online and 131 crore e-way bill generated,”

What are the cases for GST exemption?

These are a few cases where GST is exempted:

1. GST Exempted for Business:
   • Small and medium scale businesses are exempted from GST if the aggregate turnover is up to a specified limit.
2. GST Exempted for Goods:
   • These are the goods as stated by the GST Council:
     1. Goods in the interest of the public.
     2. Goods that are mentioned by the government through an order.
     3. Goods as stated in the official notification.
     4. Goods mentioned by the GST Council.
     5. Under the GST Act these are the kinds of exemptions:
        1. Absolute Exemption
           • In this exemption, the supply of specific kinds of goods is exempted from GST without inspecting the details of the receiver, supplier, or the state.
        2. Conditional Exemption
           • In this exemption, the supply of specific kinds of goods is exempted from GST that are subject to certain terms and conditions which have been specified under the GST Act.
3. GST Exempted for Services:
   • These are the goods as stated by the GST Council:
     1. Supplies with a 0% tax rate.
     2. Supplies which do not attract CGST or IGST as per the provisions stated in the notification that amends either Section 11 of CGST Act or Section 6 of IGST Act
     3. Supplies mentioned under Section 2(78) of the GST Act, are not taxable.

These exemptions lessen the GST burden and aid in the socio-economic development of the country.

Recently, CBIC notified that Aadhar Authentication or Physical Premise verification is now mandatory for your business.