GST exemption to the Businesses with Annual Turnover of upto Rs 40 lakh

Published on August 24, 2020
Current Context: The ministry of finance has made an announcement to exempt the businesses with an annual turnover of Rs 40 lakh from GST.
GST exemption to the Businesses with Annual Turnover of upto Rs 40 lakh

  • Earlier the businesses with an annual turnover of Rs 20 lakh were exempted from GST.
  • Along with this, another announcement was made by the finance ministry that those businesses with a turnover of upto Rs 1.5 crore can avail for Composition Scheme.
  • If such businesses who are eligible and avail for Composition Scheme will have to pay only 1% tax.
  • FM also announced that GST has also reduced the rate at which people pay tax, this move has led to increased compliance and doubled taxpayer base to Rs 1.24 crore.
  • Comparing the weighted GST rate with RNR (Revenue Neutral Rate), weighted GST rate is only 11.6% as per RBI. Whereas RNR is 15.3%.
  • Along with this, the tax rate on a large number of items has been brought down by FM. 
  • In terms of the housing sector, it is placed at a slab of 5% while GST ion affordable housing is reduced to 1%.
  • Static Part: 
    • Union Finance Minister: Nirmala Sitharaman
    • GST: - It is the Goods and Services Tax which is the indirect tax. The GST has subsumed almost all other indirect taxes which were levied by central and state governments. The GST was brought into effect from 1st July 2017.

Question: 

Q.1 The ministry of finance has made an announcement to exempt the businesses with an annual turnover of Rs _____ from GST?
a. Rs 35 lakh
b. Rs 50 lakh
c. Rs 25 lakh
d. Rs 40 lakh

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