GST Exempt If Annual Turnover Less Than ₹40 Lakh: Finance Ministry

The Finance Ministry also acknowledged former finance minister Arun Jaitley’s role in the implementation of GST.

The Union Ministry of Finance on Monday, 24 August, announced on Twitter that businesses with an annual turnover of up to Rs 40 lakh will be exempt from GST. This is an improvement from the original exemption limit, as stated by the ministry, of Rs 20 lakh.

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

The ministry also informed that the businesses with turnover of up to Rs 1.5 crore can opt for the Composition Scheme, that will allow them to only pay one percent tax.

“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 percent tax.”     

Ministry of Finance Statement

Further, the ministry said that, “Significant relief has been extended to the construction sector, particularly the housing sector. It has now been placed at the 5 percent rate. GST on affordable housing has been reduced to 1 percent.”

Reduced Tax on Soap, Cinema Tickets, Food Grinders

The Ministry of Finance, on Monday, marked former finance minister Arun Jaitley’s death anniversary and acknowledged his contribution in the implementation of GST.

“Before GST, the combination of VAT, Excise, Central Sales Tax and the cascading effect of tax on tax resulted in the standard rate of tax being as high as 31 percent in many cases.”   

Ministry of Finance

The Ministry also, in a series of tweets, shared that the tax rates for common use items such as hair oil, toothpaste and soap has come down from 29.3 percent to 18 percent.

Appliances such as refrigerators, washing machines, vacuum cleaners, food grinders and mixers, vegetable juice extractor, shavers, hair clippers, water heaters, hair dryers, electric smoothing irons, TVs (up to 32 inches) have all seen tax rates lowered from 31.3 percent to 18 percent due to GST, informed the ministry.

“The tax on cinema tickets, earlier anywhere between 35 percent to 110 percent, has been brought down to 12 percent and 18 percent in the GST regime.”

Ministry of Finance Statement