Budget 2019: GST exemption doubled from Rs 20 to 40 lakhs for small traders

New Delhi: The Goods and Services Tax (GST) has turned out to be a game changer for the country’s economy with average tax collection in the current financial year being pegged at Rs 97,100 crore per month as compared to Rs 89,700 crore per month in the first year when the GST was introduced in July 2017.

Also Read: Budget 2019: Full text of finance minister Piyush Goyal’s speech in Parliament

“The average monthly tax collection in the current year is Rs 97,100 crore per month as compared to Rs 89,700 crore per month in the first year,” said Union Minister for Finance, Corporate Affairs, Railways, and Coal Goyal, while presenting the interim Budget for 2019-20 in the Lok Sabha on Friday.       

“The State revenues are improving with guaranteed 14 per cent annual revenue increase for the first five years,” he added. “The GST Council would appoint a Group of Ministers (GoM) to examine and make recommendations to reduce GST burden on the home buyers,” said the Finance Minister.

Biggest Taxation Reform

“GST, the biggest taxation reform, led to increase in tax base, higher collections and ease of trade,” said Union Minister for Finance, Corporate Affairs, Railways, and Coal Goyal, while presenting the interim Budget for 2019-20 in the Lok Sabha on Friday.       

“Rates continuously reduced providing relief of about Rs 80,000 crore annually to consumers, while most items of daily use of poor and middle class now in the zero per cent or 5 per cent tax slab,” he said.

 “The Goods and Services Tax (GST) reforms lingered on during the previous government for almost a decade. Our government implemented the GST, which is undoubtedly the biggest taxation reform undertaken since Independence,” he said.

“Seventeen different taxes levied by the Central and State/UT governments with cascading effect of the tax on tax were consolidated into one GST. India became a common market. GST has resulted in the increased tax base, higher collections, and ease of doing business,” he said.

“This will reduce the interface between the taxpayers and the Government for day-to-day operations and assessments. Now returns are fully online and e-way bill system is in place. Inter-state movements have become faster, more efficient, and hassle-free with no entry tax, check posts, and truck queues among others,” he said.

The Finance Minister said: “The high taxation levied on multiple commodities in the pre-GST regime has been rationalised and the burden on the consumer, especially the poor and the middle class, has been significantly reduced.”

GST relief to small businesses

“GST aims at benefiting small traders, manufacturers and service providers. Exemptions from GST for small businesses have been doubled from Rs 20 lakh to Rs 40 lakh,” said Finance Minister Goyal.

“Further, small businesses having turnover up to Rs 1.5 crore have been given an attractive composition scheme wherein they pay only one per cent flat rate and have to file one annual return only,” he said.

“Similarly, small service providers with turnover up to Rs 50 lakhs can now opt for composition scheme and pay GST at 6 per cent instead of 18 per cent,” said the minister.

“More than 35 lakh small traders, manufacturers, and service providers will benefit from these trader friendly measures. Soon, businesses comprising over 90 per cent of GST payers will be allowed to file a quarterly return,” the minister added.

The Finance Minister asserted that in spite of such major rate reductions and relaxations, revenue trends are encouraging.

“The average monthly tax collection in the current year is Rs 97,100 crore per month as compared to Rs 89,700 crore per month in the first year. The State revenues are improving with a guaranteed 14 per cent annual revenue increase for the first five years.”