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17th March 2019

SOME RELAXATIONS TO SMALL TAX PAYERS

  Recently, Govt. had provided some relaxations to the small taxpayers in the registration as well as on tax rate applicable on the supplies made by them. These relaxations will come into effect w.e.f. 1st April, 2019.

1. Exemption from obtaining registration (Notification No. 10/2019 (Central Tax)): A person is eligible to avail exemption if he satisfies both the under mentioned conditions:-
  • Engaged in exclusive supply of goods
  • Aggregate turnover in the FY does not exceed 40 Lakh Rupees
Benefit of exemption is not available if:
  • Persons required to take compulsory registration u/s 24
  • Persons engaged in making the intra-state supply in the specified states*.
  • Persons who had taken voluntary registration
  • Persons engaged in making supply of Ice cream & other edible ice, whether or not containing cocoa; Pan masala and Tobacco & manufactured tobacco substitutes.
* Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura, Uttrakhand
2. Reduction in rate of tax (Notification No. 02/2019 (Central Tax Rate))
Applicable on GST Rate Conditions
First supplies of goods or services or both up to an aggregate turnover of Rs. 50 Lakh.
Where 'First supplies of goods or services or both':
  • To determine Eligibility of a person to pay tax under this notification: shall include the supply from 1st day of April of FY to the date from which he becomes liable for registration.
  • To determine tax payable under this notification: shall not include the supply from 1st day of April of FY to the date from which he becomes liable for registration.
6%
1) If person had taken more than 1 registration under the same PAN, then CGST on all supplies made by that person is paid at 3%.
2) Person shall not collect any tax from the recipient nor he shall claim any ITC.
3) Person is required to issue 'Bill of Supply' instead of 'Tax invoice.'
4) Person shall mention the following at the top of Bill of Supply:
5) 'Taxable person paying tax in terms of N/No. 2/2019- CT (Rate) dated 07.03.2019, not eligible to collect tax on supplies.'
6) Person who avail option of paying tax @ 3% as mentioned in this notification, he shall pay tax @ 3% on all outward supplies overruling any other notification issued u/s 9(1) or 11.
7) Not applicable on inward supplies as mentioned in section 9(3) or 9(4) i.e. Person shall be liable to pay tax on such supplies at applicable rate.
Benefit of exemption is not available in following cases:
a) Aggregate turnover in preceding FY > Rs. 50 Lakh
b) Eligible to pay tax u/s 10(1)
c) Engaged in making supply not leviable to tax
d) Engaged in making inter-state supply
e) Casual taxable person
f) Non-resident taxable person
g) Engaged in making supply through E-commerce operator who is required to collect TCS
h) Engaged in the supply of following goods:-
  • Ice cream & other edible ice, whether or not containing cocoa
  • Pan masala
  • Tobacco & manufactured tobacco substitutes