The 32nd GST Council meeting focused on relief for small businesses, including higher registration thresholds and an expanded composition scheme. This article summarises the key decisions and who benefits.

Key Decisions and Outcomes from the 32nd GST Council Meeting

Important Highlights from the 32nd GST Council Meeting

The 32nd GST Council Meeting addressed several crucial aspects of the Goods and Services Tax framework in India. This meeting, like previous ones, aimed to streamline compliance, adjust rates, and introduce relief measures for taxpayers.

Recent GST Council Meeting Updates

June 24, 2022

The 47th GST Council meeting took place on June 28 and 29, 2022, in Chandigarh. Chaired by Union FM Nirmala Sitharaman, it focused on recommendations for revenue enhancement, correcting inversion issues, and refining the GST exemption list. Additionally, compliance relaxations were provided for e-commerce suppliers and taxpayers under the composition scheme.

December 29, 2021

The 46th GST Council meeting was held on December 31, 2021, in New Delhi. During this meeting, presided over by Union FM Nirmala Sitharaman, the decision to postpone the GST rate increase to 12% for textile products was made.

September 1, 2021

The 45th GST Council meeting convened on September 17, 2021. Key items on its agenda included extending tax concessions for COVID-19 essential goods, discussing GST compensation for states, and addressing the rectification of inverted tax structures.

May 28, 2021

The 43rd GST Council meeting occurred on May 28, 2021. The Council sanctioned the reintroduction of the GST amnesty scheme and rationalized late fees for all taxpayers, especially small ones. Furthermore, IGST was exempted on the import of COVID-treating equipment and relief materials until August 31, 2021.

GST Registration

The basic exemption threshold for goods suppliers will be raised from Rs 20 lakhs to Rs 40 lakhs. For service providers, this limit remains at Rs 20 lakhs. In special category States, where the registration limit is currently Rs 10 lakhs, the threshold for goods supply is increased to Rs 20 lakhs. These States have been given the option to choose either a Rs 40 lakhs or Rs 20 lakhs threshold within one week.

New Composition Scheme for Service Providers

Service suppliers or those providing a mixed supply of goods and services with an annual turnover up to Rs 50 lakhs in the preceding financial year are eligible to opt into this new scheme. The tax rate is set at 6% (comprising 3% CGST + 3% SGST).

Amendments to the Existing Composition Scheme

• The turnover limit for opting into the scheme will be increased to Rs 1.5 crore, effective from April 1, 2019.
• Tax payments will be made quarterly, while GST Returns must be filed annually.

Note: The adjustments to the GST Composition scheme for both goods and services suppliers will take effect from April 1, 2019.

Approval for Calamity Cess in Kerala

Kerala received approval to levy a Disaster/Calamity Cess of up to 1% on all intra-state supplies of goods and services within the state for a maximum period of two years.

GST Rate Adjustments

• No changes were made to GST Rates until revenue generation increases, as advised by the GST Council.
• There were no GST rate reductions on the sale of under-construction flats. Instead, a seven-member Group of Ministers (GoM) was established to analyze the implications of cutting rates from 12% to 5% on such properties.
• Additionally, no GST rate cuts were applied to private lottery distributions. A separate Group of Ministers, with representatives from both developing and selling states, will be formed to study this matter.

Extension of GST Practitioner Examination Deadline

The deadline for passing the examination for GST Practitioners was extended until December 31, 2019. This extension applies to those practitioners who enrolled under rule 83(1)(b), meaning they were sales tax practitioners or tax return preparers under previous laws for at least five years.

GSTN will provide free accounting and billing software to small taxpayers.

The GST Council recently met on December 22, 2018. Highlights from the 31st GST Council meeting are available.

Expectations from the 32nd GST Council Meeting

Prior to the meeting, several key topics were under consideration:

• Composition Scheme Expansion: Deliberations were expected on whether to include the supply of residential properties and services by small service providers under the Composition scheme. A Group of Ministers (GoM) was examining this. For residential properties, two proposals were on the table: a 5% tax rate on under-construction properties without Input Tax Credit (via a composition scheme option) or an 8% tax rate, consistent with affordable housing.
• Lottery Taxation: Discussions aimed to determine if tax rates on lotteries should be 12% or 28% for private schemes within the GST Slab.
• MSME Threshold: The Council was expected to decide on the exemption threshold limit for MSMEs.
• Calamity Fund: A committee formed during the 30th GST Council Meeting had proposed a ‘Revenue Mobility scheme’ to address funding for natural disasters, such as the Kerala floods. The 32nd GST Council Meeting was crucial for a final decision on financing natural calamities, a significant concern for many Council members.

Official Press Release from the 32nd GST Council Meeting

The government’s official press release regarding the 32nd GST Council Meeting outlines the decisions and outcomes from the session.

Frequently Asked Questions

What relief did the 32nd GST Council give small businesses?

The meeting is known for raising the GST registration exemption threshold for suppliers of goods and expanding the composition scheme, including a scheme for small service providers.

What is the composition scheme?

It allows eligible small taxpayers to pay GST at a low flat rate on turnover with simplified compliance, instead of regular returns and full input tax credit.

Are GST Council decisions applied immediately?

Decisions are implemented through central and state notifications that specify the effective date, so there is usually a short gap between the meeting and enforcement.