32nd GST Council meeting – Highlights of the latest amendments

Last Updated at: June 16, 2020
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32nd GST Council meeting - Highlights of the latest amendments

Knowing about the GST registration types would be of great help to business owners who have just started with their business. Here you would get an overview of the GST amendments and the list of requirements for GST registration for your business. A clear differentiation of the GST scheme and the composition scheme is also explained below.

GST has been the biggest taxation and economic reform pre and post-independence in our country. From the day of launch, GST has undergone significant changes to make the life of businessmen easy. On the same lines, GST registration requirements have been changed as per the latest 32nd GST council meeting held on 10th of Jan 2019.

Check out some of the articles below to find step by step information on company registration, iso registration or income tax related services and avail our resources to help you through the process.We are one of the best online service providers in the market for tax registrations and legal documentation.

 

The latest 32nd GST Council meeting has brought in some amendments. This article explains whether you are required to register under GST and what are the registration provision of the GST Law. All highlights are here.

Who should get mandatorily registered under GST?

A business entity falling under any one of the following cases should get GST registration done mandatorily.

GST Mandatory

 

However, the 32nd GST council meeting proposes to increase the turnover limit of 20 lakhs p.a. to Rs. 40 lakhs p.a. for all MSME entities, which is expected to be effective from the 1st of April 2019. More clarity is awaited from the government on the following points:

  • What will be defined as MSME (will it continue as per MSME Act or will there be a separate definition under GST law)
  • What about the existing businesses who have taken registration by considering the limit of Rs. 20 lakh. If the limit is revised to Rs. 40 lakh, it is believed that an exit window will be provided by the businesses which doesn’t require registration as per new requirements.
  • Whether all the states will agree to increase the limit to Rs. 40 lakh is a question mark.
    • As per the current MSME Act, only manufacturers and service providers having certain levels of investment in plant and machinery alone are covered. Government is expected to amend the definition or bring a new definition under GST law to include traders also under MSME umbrella.

Make Your Business GST Ready

How many types of GST registration exist?

There are two types of GST registrations which are are differentiated below.

  1. Regular scheme
  2. Composition scheme
Regular GST Scheme Composition Scheme
Where on the sales made, the actual applicable rate of GST
will be charged. There are mainly five types of GST rates
0%, 5%, 12%, 18%, 28%
On the sales made only 1% of GST will be charged by
composition scheme traders, and 2% GST will be charged by
the composition scheme manufacturers.
A seller registered under the regular scheme can take input
credit on his inputs.
A seller registered under the composition scheme cannot
take any input credit on his inputs.
Person buying from the regular scheme dealer can take the
input credit on goods he purchased.
Person buying from the composition scheme dealer cannot
take the input credit on goods he purchased from
composition dealer.
Regular scheme registrant can do Interstate sales. Composition scheme dealer cannot do inter-state sales. He
can sell only within the state.
A business which is a trading/manufacturing/service entity can opt for regular scheme. A business should only be a trading/manufacturing entity to
opt composition scheme.

However w.e.f 1st Feb 2019, an entity having services turnover of either
Rs. 5 lakhs or 10% of its total turnover (whichever is
higher) can still opt for composition scheme.

Further, the 32nd council meeting proposes to launch a separate composition scheme for service providers. It is expected to be effective from 1st of April 2019.

Regular scheme dealers should file GST returns every month. Composition scheme dealers should file GST return only once in a quarter. The 32nd Council meeting proposes yearly return for composition scheme which is expected to be effective from 1st of April 2019.
There is no maximum turnover limit under the regular scheme. An entity having more than 1 crore turnover in a year cannot undertake a composition scheme. However, w.e.f 1stFeb 2019, the limit has been increased to 1.5 crores per annum.

Let’s see through an example how both the composition scheme and regular schemes work for a product that is charged 18% GST rate.

GST scheme_1

GST scheme_2

Who can opt for Composition Scheme?

Except, the following businesses, no other business entity can opt for the composition scheme of GST registration. Please note that the below chart makes it clear that, composition scheme is not for service providers (except restaurants). Only traders and manufacturers can opt for composition scheme.

GST flowchart_2

However, with effect from 1st of Feb 2019 an entity providing services can also opt for composition scheme provided turnover from the services should not exceed higher of the following.

  1. Rs, 5 lakhs per annum or
  2. 10% of the total turnover of the entity

Further, w.e.f 1st Feb 2019, composition scheme turnover limit has been increased to 1.5 crores per annum.

Further, the 32nd council meeting proposes to launch a separate composition scheme for service providers. It is expected to be effective from 1st of April 2019. Composition GST rate for service providers is expected to be at 6%.

32nd GST council meeting also proposes to ease compliance burden on the composition scheme dealers. It proposes to launch a system where composition dealers can pay GST monthly, but file only one return per annum.

Statutory sources of the above information:

  1. Section 24 of the CGST Act, and respective provisions in SGST and IGST Act
  2. Sec 10 of CGST Act, covering the composition scheme.
  3. Press release after the 32ndcouncil meeting
  4. Set of Notifications released on 29thJan 2019.

The above highlights of the GST council meeting would be of great help to entrepreneurs. Hiring a financial consultant would be a great idea to enjoy the benefits of GST taxation. The above information offered would help to register your business under GST scheme or composition scheme based on your requirements.

0

32nd GST Council meeting – Highlights of the latest amendments

1414

Knowing about the GST registration types would be of great help to business owners who have just started with their business. Here you would get an overview of the GST amendments and the list of requirements for GST registration for your business. A clear differentiation of the GST scheme and the composition scheme is also explained below.

GST has been the biggest taxation and economic reform pre and post-independence in our country. From the day of launch, GST has undergone significant changes to make the life of businessmen easy. On the same lines, GST registration requirements have been changed as per the latest 32nd GST council meeting held on 10th of Jan 2019.

Check out some of the articles below to find step by step information on company registration, iso registration or income tax related services and avail our resources to help you through the process.We are one of the best online service providers in the market for tax registrations and legal documentation.

 

The latest 32nd GST Council meeting has brought in some amendments. This article explains whether you are required to register under GST and what are the registration provision of the GST Law. All highlights are here.

Who should get mandatorily registered under GST?

A business entity falling under any one of the following cases should get GST registration done mandatorily.

GST Mandatory

 

However, the 32nd GST council meeting proposes to increase the turnover limit of 20 lakhs p.a. to Rs. 40 lakhs p.a. for all MSME entities, which is expected to be effective from the 1st of April 2019. More clarity is awaited from the government on the following points:

  • What will be defined as MSME (will it continue as per MSME Act or will there be a separate definition under GST law)
  • What about the existing businesses who have taken registration by considering the limit of Rs. 20 lakh. If the limit is revised to Rs. 40 lakh, it is believed that an exit window will be provided by the businesses which doesn’t require registration as per new requirements.
  • Whether all the states will agree to increase the limit to Rs. 40 lakh is a question mark.
    • As per the current MSME Act, only manufacturers and service providers having certain levels of investment in plant and machinery alone are covered. Government is expected to amend the definition or bring a new definition under GST law to include traders also under MSME umbrella.

Make Your Business GST Ready

How many types of GST registration exist?

There are two types of GST registrations which are are differentiated below.

  1. Regular scheme
  2. Composition scheme
Regular GST Scheme Composition Scheme
Where on the sales made, the actual applicable rate of GST
will be charged. There are mainly five types of GST rates
0%, 5%, 12%, 18%, 28%
On the sales made only 1% of GST will be charged by
composition scheme traders, and 2% GST will be charged by
the composition scheme manufacturers.
A seller registered under the regular scheme can take input
credit on his inputs.
A seller registered under the composition scheme cannot
take any input credit on his inputs.
Person buying from the regular scheme dealer can take the
input credit on goods he purchased.
Person buying from the composition scheme dealer cannot
take the input credit on goods he purchased from
composition dealer.
Regular scheme registrant can do Interstate sales. Composition scheme dealer cannot do inter-state sales. He
can sell only within the state.
A business which is a trading/manufacturing/service entity can opt for regular scheme. A business should only be a trading/manufacturing entity to
opt composition scheme.

However w.e.f 1st Feb 2019, an entity having services turnover of either
Rs. 5 lakhs or 10% of its total turnover (whichever is
higher) can still opt for composition scheme.

Further, the 32nd council meeting proposes to launch a separate composition scheme for service providers. It is expected to be effective from 1st of April 2019.

Regular scheme dealers should file GST returns every month. Composition scheme dealers should file GST return only once in a quarter. The 32nd Council meeting proposes yearly return for composition scheme which is expected to be effective from 1st of April 2019.
There is no maximum turnover limit under the regular scheme. An entity having more than 1 crore turnover in a year cannot undertake a composition scheme. However, w.e.f 1stFeb 2019, the limit has been increased to 1.5 crores per annum.

Let’s see through an example how both the composition scheme and regular schemes work for a product that is charged 18% GST rate.

GST scheme_1

GST scheme_2

Who can opt for Composition Scheme?

Except, the following businesses, no other business entity can opt for the composition scheme of GST registration. Please note that the below chart makes it clear that, composition scheme is not for service providers (except restaurants). Only traders and manufacturers can opt for composition scheme.

GST flowchart_2

However, with effect from 1st of Feb 2019 an entity providing services can also opt for composition scheme provided turnover from the services should not exceed higher of the following.

  1. Rs, 5 lakhs per annum or
  2. 10% of the total turnover of the entity

Further, w.e.f 1st Feb 2019, composition scheme turnover limit has been increased to 1.5 crores per annum.

Further, the 32nd council meeting proposes to launch a separate composition scheme for service providers. It is expected to be effective from 1st of April 2019. Composition GST rate for service providers is expected to be at 6%.

32nd GST council meeting also proposes to ease compliance burden on the composition scheme dealers. It proposes to launch a system where composition dealers can pay GST monthly, but file only one return per annum.

Statutory sources of the above information:

  1. Section 24 of the CGST Act, and respective provisions in SGST and IGST Act
  2. Sec 10 of CGST Act, covering the composition scheme.
  3. Press release after the 32ndcouncil meeting
  4. Set of Notifications released on 29thJan 2019.

The above highlights of the GST council meeting would be of great help to entrepreneurs. Hiring a financial consultant would be a great idea to enjoy the benefits of GST taxation. The above information offered would help to register your business under GST scheme or composition scheme based on your requirements.

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