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Concessional Rate of GST for Small Service Providers

May 28th, 2019 in GST

As per notifications released by the Central Goods and Services Tax (CGST) authorities on March 7th, 2019, a concessional rate of GST has been prescribed for suppliers of exclusive goods, composition dealers, and normal taxpayers. Read on to know about the new concessional GST rates for the same.

 

 

 

GST Rate for Exclusive Goods Supply

According to notification number 10/2019 released by CGST on 7th March 2019, a dealer is exempted from GST registration if s/he is an exclusive supplier of goods who has an aggregate turnover of Rs. 40 lakhs. This exemption has been made effective from April 1st, 2019 in regard of the provision provided in CGST Act Section 23(2).

However, the aforementioned concession does not apply to the following individuals:

  • Those who are mandatorily required to register under GST
  • Suppliers of ice cream, ice, pan masala, tobacco, and manufactured substitutes of tobacco
  • Intrastate suppliers in Mizoram, Meghalaya, Manipur, Arunachal Pradesh, Sikkim, Puducherry, Nagaland, Uttarakhand, Tripura, and Telangana
  • Those who have obtained GST registration voluntarily
  • Registered taxpayers who wish to continue their pre-existent GST registration.

The aggregate turnover threshold limits to obtain GST registration for different states has been shown below for suppliers under different categories:

  • Exclusive Supply of Goods:
    • Rs. 10 lakhs: Mizoram, Tripura, Nagaland, Manipur
    • Rs. 20 lakhs: Meghalaya, Telangana, Puducherry, Uttarakhand, Arunachal Pradesh, Sikkim
    • Rs. 40 lakhs: the rest of the states and union territories
  • Supply of Goods and Services:
    • Rs. 10 lakhs: Mizoram, Tripura, Nagaland, Manipur
    • Rs. 20 lakhs: Uttarakhand and the rest of the states and union territories.

GST Rate for Composition Dealers

According to notification number 14/2019 released by CGST on 7th March 2019, the aggregate turnover threshold limit has been increased to Rs. 1.5 crores for dealers who have opted for the composition scheme under the CGST Act Section 10 . The limit for aggregate turnover will be Rs. 75 lakhs for eligible registered taxpayers in Meghalaya, Sikkim, Manipur, Tripura, Arunachal Pradesh, Uttarakhand, and Mizoram.

However, manufacturers of ice cream, ice, pan masala, tobacco, and manufactured substitutes of tobacco will not be eligible to opt for the composition scheme.

These changes have been made effective from April 1st, 2019.

GST Rate for Composition Service Providers

A registered service provider will be eligible to opt for the composition scheme if s/he has an annual turnover is less than Rs. 50 lakhs. Such a service provider will then have to pay GST at 6% (3% CGST and 3% SGST).