June 13, 2024
GST exemption for small business in India

No matter you own a small business or big, the question whether GST exemption is useful for small business always scratches your mind. Because any business you do, or any transaction you make, sending or receiving, involves a small business owner. A clarity in the whole process of GST is mandatory. To make the process simpler and understandable you should get to the basics first. GST comes handy with a whole set of rules and regulations. Although there is no rocket science in GST, it depends on how often you are exposed to its information.

As a business person, first, know about the GST rules in India

GST exemption for small business in India

Goods and Services Tax act comes with a set of rules that is meant to be followed by every registered taxpayer of the nation. Now, if you will go through the government website and start reading, the technicality will make you feel confused.

So better understand the rules of GST this way:

  • First of all, GST is a comprised tax system that means you are paying your money as the tax to the government but centrally managed. The tax recipient is clearly mentioned for your ease as a taxpayer.
  • GST replaces all other taxes such as excise duty, service tax, VAT, and central surcharges.
  • If your business turnover is above 20 lakhs you are liable to pay the GST
  • GST is separated in two parts, central and state. This protects the right of collecting and levying taxes.
  • As per GST, if you are making a sale within the state, CGST (Central GST) +SGST (State GST) is applied. For the sale to the other state, IGST (Integrated GST) is applied.

Knowing these rules can make you better in understanding the exemption or reduction that GST council provides for the small businesses in India. If you are a small business owner and even your business turnover is less than 20 lakhs, still, you have to get registered under the GST act. Despite this fact, there are few more points that you as a small business owner must know.

  • If your business is registered with GST and your annual turnover is less than 20 lakhs, then exemption will be provided to your business.
  • If you are an agriculturists and your business involves providing an output of your farms to the market then exemption will be provided.
  • If you are in the business of common items of daily use like eggs, bread, milk, meat, salt etc. then the exemption is applicable to your business.
  • Items like alcohol, diesel, petrol, fuel also avail GST exemption. So if you are in the business of any of these, you will be relieved.
  • You might be involved in the business that neither comes under goods nor services like employee services, court, funeral, the sale of the building, lottery etc. GST exemption is allowed for these type of businesses.

Moreover, these are the areas where GST exemption for small business in India is applicable. But what good can it bring to your business? Mostly, small businesses do not have the amount of exposure and resources that the owners of big service providers have. So, GST exemption from your business will deliberately save time and you do not even have to get into hectic procedures. 

Save your business from sufferance

Some business owners might say that “my business, my way” and refuse to register for GST. And owning this kind of attitude will bring no good for your business. Ultimately, it will suffer. Because under GST and its unique approach to maintaining taxation, if you are not registering then GST will sort of rate you under Compliance Rating Score.

If your tax paying habits are displayed poor in the market then it means no business in the future. In the business, reputation has an equal importance as the service you provide. Better make sure you do not mess with the government. Be a responsible citizen as well as a business owner.


GST is breaking the monotony of the taxation system that people used to follow in the earlier days. Now the benefits for you under the GST act are such that can help you improve your small business. To excel the growth of your business, you must get registered for GST. Learn about all the other facts related to GST. Always look for the ways in which you can incorporate the new taxation system of India and create wonders for your business.

GST exemption for small business in India

Also, keep a reminder to yourself that GST is sophisticated, sorted, and for the betterment of the citizens and businesses of India. Almost one-crore taxpayers are already registered under GST. Believe in these number and the vision of the government of India.

It’s time to grow. If you haven’t yet, then register today and avoid the unnecessary time kill.

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