The goods and services tax (GST) is all set to be rolled out from July 1, 2017 but not all business establishments need register to enable collection and remittance of taxes. There are certain entities which are either exempt from the GST regime or have to pay a fixed rate of tax (also referred to as presumptive tax).
First, let's look at business entities that are exempt:
Manufacturers, service providers and traders with an annual turnover below Rs 20 lakh*** need not pay GST, and therefore, are exempt from registration with the concerned authority (GSTN).
***: The limit is Rs 10 lakh for business entities in Assam, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Tripura, Sikkim, Uttarakhand and Himachal Pradesh.
The second point to note is that certain establishments need to register but can pay GST rate of composition (presumptive tax) based on their annual sales (turnover) of up to Rs 75 lakh^^^.
Here is the break-up in such cases:
Traders: 1 percent
Manufacturers: 2 percent
Restaurants: 5 percent
^^^: The limit is Rs 50 lakh for business establishments in Assam, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Tripura, Sikkim and Himachal Pradesh.
Here are some queries answered by the government for the benefit of businesses migrating to GST:
