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The GST Council’s decision to double the exemption limit for micro, small and medium enterprises (MSMEs) from ₹20 lakh to ₹40 lakh will help small businesses, according to industry players
The Council also raised the annual turnover limit for the Composition Scheme to ₹1.5 crore from ₹1 crore with the facility of quarterly payment of tax along with annual return filing. The Council had also reduced tax on many items.
This is significant given that there are almost 60 million small and medium-sized enterprises in India which play a very important role in driving the country’s economic growth and development.
“This is one of the most crucial decisions of the Council and will indeed help a large number of taxpayers. It is also a step towards tax simplification and will ensure ease of compliance,” said Sandip Somany, President, Federation of Indian Chamber of Commerce and Industry, in a statement.
Chandrajit Banerjee, Director-General, CII, said, “The Composition Scheme simplifies the tax regime and takes a big burden of compliance off the MSME sector. This would eventually lead to lower costs and higher competitiveness for MSME.”
“Initiating a composition scheme for the services enterprises will integrate these enterprises with their manufacturing counterparts,” he added.
Niranjan Hiranandani, Senior Vice-President, Assocham, said the composite turnover limit is a welcome move, as the small traders and businesses will pay a small tax based on turnover rather than value-addition.
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