Small Businesses Eye GST Threshold Hike, Registration Clarity in Budget 2024

10 Jan 2024 , 10:58 AM

In order to facilitate business dealings, the Union Budget for the fiscal year 2024–2025 may include modifications to the GST rates on insurance products, input tax credits, and minimum thresholds. But since she will be presenting an interim budget during an election year, Finance Minister Nirmala Sitharaman might decide against making any significant changes to the GST rates.

Small- and medium-sized business owners anticipate a reduction in the Goods and Services Tax (GST) registration minimum level in this year’s Budget, which may help small-scale suppliers.

Such vendors would find it easier to conduct business with reduced compliance costs. Units having a revenue over Rs 40 lakh (for goods and Rs 20 lakh for some special category states) and Rs 20 lakh (for services) are required to register for GST.

For these tiny enterprises, a rise in the cap to Rs 50 lakh would be a relief, and the industry is also expecting that the Union Budget, which is scheduled for presentation on February 1, will provide some clarification on the requirement that export-oriented businesses register for GST.

In this year’s budget, exporters anticipate a statement about the streamlining of the input tax credit (ITC) procedure. Exporters are still required to provide these certificates under the GST regime, even though the Foreign Inward Remittance Certificate (FIRC) requirement has been eliminated by the RBI and the Foreign Exchange Management Act.

In the past, Finance Minister Nirmala Sithraman has refrained from introducing any significant modifications to the GST rate structure through the Finance Bill. To introduce revisions to the new tax system, the finance minister has nevertheless announced some changes to the GST regulations.

Several modifications were announced by the Finance Minister in the previous budget for FY 2023-24. The minimum tax amount required to begin a GST prosecution was raised from Rs 1 crore to Rs 2 crore for the crime of issuing bills without providing goods, services, or both.

The government is anticipated to surpass the goal for FY24, according to the most recent data on GST collection. Since the monthly collections have been rising steadily thus far, the Finance Minister may decide to raise the GST collects when she releases the Interim Budget on February 1.

In the first eight months of FY24, GST collection was Rs13.32 crore, a 12% increase over the amount collected from April to November of 2022. Small and medium-sized businesses across all industries are hoping for a reduction in the GST on a range of goods and services due to the increase in monthly GST revenues.

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