Now, Businesses with an annual turnover of up to Rs 40 lakh are GST exempt: FinMin

Now, Businesses with an annual turnover of up to Rs 40 lakh are GST exempt. Initially, this limit was Rs 20 lakh. Additionally, those with a turnover up to Rs 1.5 crore can opt for the Composition Scheme and pay only 1% tax.

Once GST was implemented, the tax rate on a large number of items was brought down. As of now, the 28% rate is almost solely restricted to sin and luxury items. Out of a total of about 230 items in the 28% slab, about 200 items have been shifted to lower slabs.

Now, Businesses with an annual turnover of up to Rs 40 lakh are GST exempt. Initially, this limit was Rs 20 lakh. Additionally, those with a turnover up to Rs 1.5 crore can opt for the Composition Scheme and pay only 1% tax. (1/5) pic.twitter.com/Jy589R1qNV

— Ministry of Finance (@FinMinIndia) August 24, 2020

GST has reduced the rate at which people have to pay tax. The revenue-neutral rate as per the RNR (Revenue Neutral Rate) Committee was 15.3%. Compared to this, the weighted GST rate at present, according to the RBI, is only 11.6%, the ministry said.

Significant relief has been extended to the construction sector, particularly the housing sector. It has now been placed at the 5% rate. GST on affordable housing has been reduced to 1%.

Also Read: Now, Composition Taxpayers can prepare Form GSTR-4 (Annual) for FY 19-20 using the offline utility

The taxpayer base has almost doubled since the roll out of GST. The numbers of assessee covered by the GST at the time of its inception were about 65 lakh. Now the assessee base exceeds 1.24 crore.

Before goods and services tax (GST), the combination of value-added tax (VAT), excise, sales tax, and their cascading effect resulted in a high standard rate of tax up to 31%, the ministry tweeted.

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, the ministry said.

All processes in GST has been fully automated. Till now 50 crore returns have been filed online and 131 cr E-way bill generated.