December 16, 2021

Recent Changes in GST – Registration and Composition Scheme

The Goods and Services Tax (GST) council, at its 32nd meeting, held on 10th January 2019, announced several changes.

GST Registration Limit:

One of those changes is that GST registration limit has been increased from Rs.20 Lakhs to Rs.40 Lakhs. This has been hailed as a major decision to help small taxpayers go out of the tax net and, hence, the related compliances and costs. 1. Applicability: This limit is applicable from FY 2019-20 i.e., from 1st April 2019. 2. For Goods only: This limit is applicable for only sale of goods but not for services whereas the limit continues to be Rs. 20 Lakhs. For the special category States, the limit for registration is currently at Rs. 10 Lakhs. This limit in case of supply of goods is increased up to Rs. 20 Lakhs and such States have been given an option to either choose Rs 40 Lakhs or Rs. 20 Lakhs threshold limit in a week’s time. 3. For intrastate state sales: This limit is not applicable for interstate sales i.e., sales from one state to other. 4. Registration: This change does not affect Section 24 of CGST Act and, hence, Section 24 remains same. Section 24 specifies few circumstances/situations where the GST registration is mandatory.

New Composition scheme for Services providers:

Those suppliers rendering either independent services or providing a mixed supply of goods & services with a turnover of up to Rs. 50 Lakhs p.a in the preceding financial year, can join this scheme. The Tax rate is fixed at 6% (3% CGST +3% SGST).

Changes to existing Composition scheme:

  • Increase in the limit to opt into the scheme has been increased from Rs. 1 Crore to Rs. 1.5 Crore.
The effective changes to GST Composition scheme for both suppliers of goods and services will apply from 1st April 2019.

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