Goods and Services tax might have come as a boon to Indian economy. Furthermore, there is also an immense flow of benefits that the MSMEs (Micro Small and Medium Enterprises) can enjoy. However, when all is said and done, the compliances associated with GST is no trouble for large companies, as they have the resources to follow through with them. On the other hand, the small companies might find themselves at a disadvantage when it comes to following through with the compliances.
Therefore, there exists GST composition scheme exists. This scheme states that the small business have only to pay minimum rate of taxes based on their annual turnover. The limit to which this scheme can be enjoyed has recently been doubled at the recent meeting of the GST council. Among the ones who are eligible for this particular scheme, the Service providers are the ones that are recently introduced.
Exemption scheme extended to service providers
Under the previous rule, the tax payer who only dealt with the supply of goods was the one who could be the part of this service. However, this also meant that the service providers were exempted from this composition scheme.
Therefore, the recent development is good news for them as the latest announcement of GST Council has stated that the composition scheme shall now be extended to the small scale service providers.
The caveat is that the small scale service providers should only have the annual turnover of INR 50 lakhs. The tax rate set for them is 6 percent.
There have been other developments as per the news from the GST council and you can find all about it right here at Registrationwala.