The GST Council in its 32^nd Meeting held today under the Chairmanship of the Union Minister of Finance & Corporate Affairs, Shri Arun Jaitley in New Delhi took the following major decisions to give relief to MSME (including Small Traders) among others -

1.   Increase in Turnover Limit for the existing Composition Scheme: The limit of Annual Turnover in the preceding Financial Year for availing Composition Scheme for Goods shall be increased to ₹ 1.5 crore. Special category States would decide, within one week, about the Composition Limit in their respective States.

1.1    Compliance Simplification: The compliance under Composition Scheme shall be simplified as now they would need to file one Annual Return but Payment of Taxes would remain Quarterly (along with a simple declaration).

2.    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. ₹ 40 lakhs and ₹ 20 lakhs. 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 ₹ 20 lakhs and in case of Special Category States at ₹ 10 lakhs.

3.   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 ₹ 50 lakhs.

3.1  The said Scheme Shall be applicable to both Service Providers as well as Suppliers of Goods and Services, who are not eligible for the presently available Composition Scheme for Goods.

3.2  They would be liable to file one Annual Return with Quarterly Payment of Taxes (along with a Simple Declaration).

4.     Effective date: The decisions at Sl. No. 1 to 3 above shall be made operational from the 1^st of April, 2019.

5.    Free Accounting and Billing Software shall be provided to Small Taxpayers by GSTN.

 6.   Matters referred to Group of Ministers:

        i.   A seven Member Group of Ministers shall be constituted to examine the proposal of giving a Composition Scheme to Boost the Residential Segment of the Real Estate Sector.

      ii.    A Group of Ministers shall be constituted to examine the GST Rate Structure on Lotteries.

7.  Revenue Mobilization for Natural Calamities: GST Council approved Levy of Cess on Intra-State Supply of Goods and Services within the State of Kerala at a rate not exceeding 1% for a period not exceeding 2 years.

Composition scheme reform expands thresholds and simplifies compliance for small taxpayers, adding a composition option for services. Increase in composition and registration thresholds and simplified compliance were adopted: the turnover limit for the Composition Scheme for Goods is raised with Special Category States able to set limits; composition taxpayers will file one annual return with quarterly tax payments and a simple declaration. Suppliers of goods will face a two-tier exemption threshold for registration, while service providers' registration threshold remains lower with reduced limits in special category States. A Composition Scheme for Services is introduced for eligible service and mixed suppliers with a composite rate and the same simplified return/payment regimen. These measures are effective from the start of the next fiscal quarter.