In recently concluded 32nd Goods & Services Tax (GST) Council meeting, the government tried to ease the process of GST further. We have explained this in one of our earlier articles as to how the Modi government has adopted a ‘Minimum Viable Product’ approach (feedback based continuous improvements) to smoothen the process of GST implementation in the country. Some of the important decisions taken to further boost the Micro, Small and Medium Enterprises (MSMEs), in the meeting, are as follows:
|1.||Increase in Turnover Limit for the existing Composition Scheme for Goods||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, within one week, about the Composition Limit in their respective States.|
|2.||Composition Scheme for Services||A Composition Scheme shall be made available for Suppliers of Services (or Mixed Suppliers) with a Tax Rate of 6% (3% CGST +3% SGST) having an Annual Turnover in the preceding Financial Year up to Rs 50 lakh.|
|3.||Higher Exemption Threshold Limit for Supplier of Goods||There would be two Threshold Limits for exemption from Registration and Payment of GST for the suppliers of Goods i.e. Rs 40 lakh and Rs 20 lakh. States would have an option to decide about one of the limits within a weeks’ time. The Threshold for Registration for Service Providers would continue to be Rs 20 lakh and in case of Special Category States at Rs 10 lakh.|
|4.||Effective date:||All the above decisions are to be operational from April 01, 2019.|
|5.||Free Accounting and Billing Software||Government shall provide them to Small Taxpayers by GSTN.
Note: Above content is based on the PIB release.
Has Gabbar Singh Tax Barb Backfired?
The Congress Party whose President Rahul Gandhi has been attacking the government for destroying the small businesses by implementing the GST (Or Gabbar Singh Tax in his words), took a complete U-turn by attacking the government for giving relief to the same MSMEs.
A news report by Hindustan Times quoting the government officials familiar with the matter said, “Opposition-ruled states, particularly ones ruled by the Congress and the Left, did not want the exemption to be raised”. Central Government wanted to raise exemption limit from Rs. 20 lakh to Rs. 75 lakh but due to the opposition by Congress and Left parties, it could only be raised to Rs. 40 lakh and that too to be decided by states, the report added. This happened as states too have the voting rights and say on matters discussed in GST council meeting.
This is not the first time that Congress Party has opposed the Modi government’s decisions of providing relief to small traders or common masses.
When Modi government announced major rate cuts on many items under GST on December 22, 2018, the opposition parties like Congress, Left and TMC opposed the rate cuts in the GST council meeting. Below is the report by Indian Express.
According to this report,
- “In Kerala, sources said that with revenues not increasing, the time is not right to cut rates.”
- “West Bengal, which had said that it wanted an 18 per cent rate for goods other than luxury and sin goods, in Saturday’s meeting said that this was not the time for a rate cut.”
If one goes by the confused stand of opposition parties on GST, then it is not difficult to decipher as to why Congress-led UPA couldn’t implement GST in the country. Importantly, this exposes the blatant hypocrisy of opposition parties and leaders like Rahul Gandhi and Mamata Banerjee as they attack Prime Minister Narendra Modi on GST in their election speeches. But, when it comes to GST council meeting, they cite reasons like revenue loss and not allow the government to provide relief to small traders and common masses.