Developing countries like India with a large variety of enterprises, large and small, in its economy. While mega-industries and MNCs are helping the country stand out in the world economy, mid-, small- and micro-enterprises ( MSMEs) are fulfilling important legs in the flow of goods and services across the nation.
These companies are not very large in their operations, yet they make significant contributions a great deal to the nation’s progress.
Types of Tax Payers under GST
The GST divides taxpayers into three categories based on their turnover and the correlation between filing:
- Regular Taxpayers – Taxpayers with an annual turnover of more than Rs. 1.5crores and 75 lakhs for North-Eastern states and Himachal Pradesh are classified as regular taxpayers and are obligated to file monthly returns mostly on the nature of business as appropriate.
- Composite Taxpayers – Taxpayers/companies with an annual turnover of Rs. 1.5 crores (Rs. 75 lakhs for the North Eastern States and Himachal Pradesh, Rs. 50 lakhs for Service Providers) are required to submit only one GSTR 4 return form. They can also appreciate the reward of getting taxed at a lower rate at the same time. Previously the threshold was Rs. 1 crore but after the 32nd GST Council meeting, the same has been increased to Rs. 1.5 crore.
- Exempted Taxpayers – Taxpayer/businessperson with or below the annual turnover of Rs. 40 lakhs is excluded from paying or collecting tax on the supply of their goods or services. Previously, the turnover constraint was Rs. 20 lakhs but the same has been lengthened to Rs. 40 lakhs after the 32nd meeting of the GST Council.
Non-eligibility under Composite Scheme
In addition to taxpayers with only an annual turnover above 1.5 crores, the following individuals could not opt for the scheme:
- Provider of other services that are not related to restaurants.
- Ice cream manufacturer, pan masala, or tobacco.
- An individual making supplies from between states.
- A taxable person, or a taxable non-resident.
- Businesses that supply goods via an e-commerce operator.
Sharda Associates deliver one of India’s leading GST services. Our GST compliance solution is designed to make the process of preparing and filing your return easy and efficient.
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