Major relief to small traders in J&K
Services included with just 6 pc tax
JAMMU, Jan 10: In a major relief to small traders and businessmen, the State Government today opted for Rs 40 lakh limit for registration of traders under Goods and Services Tax (GST), thus, doubling the limit from Rs 20 lakh, raised the limit of composition from Rs 1 crore to Rs 1.5 crore and included Services in the GST Composition Scheme, who would have to pay only 6 percent GST as against present 18 percent.
The Jammu and Kashmir Government representatives in the GST Council meeting held in New Delhi today opted for Rs 40 lakh limit for registration of traders under the GST, giving major relief to small and marginal businessmen as present such limit was Rs 20 lakh, official sources told the Excelsior.
They said the States were given an option to raise the exemption limit to Rs 40 lakh or keep it to Rs 20 lakh per annum for keeping the traders exempting from purview of registration under the GST.
“Taking into account the interests of small and marginal businessman, the State Government representatives on directions of Governor Satya Pal Malik, opted for Rs 40 lakh limit,” sources said, adding that the decision will benefit large number of small businesses.
“Aggregate turnover of Rs 40 lakh would now be exempted from the GST. Currently, businesses with a turnover of up to Rs 20 lakh were exempted from the GST registration,” sources said.
They pointed out that the Central Government will be bearing an annual revenue loss on account of doubling exemption limit to Rs 40 lakh, considering that all States implement it, at Rs 5200 crore.
The State Government also decided to raise the limit of composition to Rs 1.5 crore from present Rs 1 crore, which will again benefit the small traders and manufacturers, who will now pay quarterly tax and have to file Annual Return only, thereby reducing their compliance burden.
Commissioner State Taxes, PK Bhat, who was part of J&K Government team in the GST Council meeting, told the Excelsior that all these decisions will be applicable from April 1, 2019 i.e. the start of next financial year of 2019-20.
The J&K delegation was led by Advisor to Governor, Kewal Krishan Sharma, who holds charge of the Finance Department and comprised Principal Secretary, Finance Department, Navin K Choudhary, apart from PK Bhat.
Sources said the GST Composition Scheme, under which small traders and businesses pay a one per cent tax based on turnover, can now be availed by the traders with a turnover of Rs 1.5 crore, against the present Rs 1 crore, also with effect from April 1, 2019.
Yet another significant decision opted today by the Jammu and Kashmir Government at the GST Council pertained to inclusion of Services as the Service providers and suppliers of both goods and services up to a turnover of Rs 50 lakh would be eligible to opt for the GST Composition Scheme and pay a tax of 6 percent as against present 18 percent.
Sources said the twin decisions under the Composition Scheme would have a revenue impact of an estimated Rs 3000 crores per annum across the country.
“Businesses opting for the Composition Scheme would have to file just one Tax Return annually but pay taxes every quarter. Also free accounting and billing software will be made available to small assesses up to Rs 1.5 cr turnover,” they added.
According to sources, there were two thresholds-Rs 40 lakh and Rs 20 lakh-for exemption from registration and payment of the GST for the suppliers of goods with the facility that one can ‘opt up or opt down’ depending upon revenue. The Jammu and Kashmir Government taking into account the interests of small and marginal businessmen, today opted for Rs 40 lakh turnover for registration.
However, sources said, few States had a view that if the turnover threshold is hiked to Rs 40 lakh, their assessee base gets eroded.
The J&K Government supported the proposal and the initiative taken by the GST Council, which will provide assistance and necessary support to small and marginal traders/manufacturers in the field of accounting for better and easy compliance under the GST Law.
Major relief to small traders in J&K