How Have The Changes In The GST Act Impacted The Taxpayers?

How Have The Changes In The GST Act Impacted The Taxpayers

We all know what is GST Act. It is one revolution that took up the complete indirect taxation regime in the country through a transformation. Earlier when four different taxation laws governed the indirect taxes, GST came to repeal all of them and serve as a single Act for all kinds of indirect taxes. And this transformation has profoundly influenced the entire economy of the country. Moreover, the transformations have not stopped yet. There are continuous changes made to the Act so that it could be made better to serve out more benefits of GST as it was planned before the introduction of the Act.

So, what are these changes that have come to the GST Act? And have they really served a better purpose? Well, let us have a look.

Latest Changes to the GST Act

GST is a vast Act, and with such vastness, it is not possible to be correct with every single thing in one single go. There is always a scope of changes, and you come to know of them only when you practically see the Act being implemented and functioning. The same is the case with the GST Act. After the implementation of the Act, the government could find many areas of improvement under the Act and has been continuously working upon them by making the relevant amendments. Here are some of the essential changes and amendments that have been introduced in the Act.

Change in the Threshold Limits for Getting GST Registration

A GST registration is what creates the identity of a supplier or service provider as a taxpayer under the GST Act through a GST identification number. So, this is something that the suppliers and service providers must necessarily get. But for the people whose scale of operations has been really low, and they carry a small business, a GST registration could have been an unnecessary burden on them. Keeping this in mind, the government had specified a threshold limit of Rs. Ten Lakhs for registration. This means that only the specified categories of persons whose annual turnover exceeds Rs. Ten Lakhs shall be liable to take registration under the GST Act.

However, later the government realized that this was still creating a burden of certain small businesses. So, the government came up with an amendment and increased this limit from Rs. Ten Lakhs to Rs. Twenty Lakhs. This amendment necessarily worked out very positively for the taxpayers in saving them from the unnecessary burdens of the registration formalities until they cross the threshold.

Amendments in Relation To the Composition Scheme

Before we talk about the amendments in the composition scheme, it is crucial that we first have an idea of what is the composition scheme under the GST Act.

A composition scheme is a kind of a plan for the small dealers who are taxpayers under the GST Act. The scheme offers the dealers to pay GST at a certain nominal percentage on their turnover instead of the normal rates of GST that are applicable to all the taxpayers. This helps them save a considerable amount that they would otherwise have to pay as a tax.

However, to avail of this benefit, they would have to forego another benefit, and that is the eligibility for claiming the input tax credit. As per this, any dealer who opts for the composition scheme under GST cannot claim the input tax credit on its transactions. Moreover, the other dealers also cannot claim the input tax credit on the transactions made with a dealer who is registered under the composition scheme of GST. Due to this reason, many times, these dealers find it difficult to enter into transactions with huge businesses that are highly interested in taking input tax credits since it is a remarkable sum for them.

However, even with that disadvantage, the scheme is overall a wise choice for the dealers who look forward to making savings on their taxes, and the dealers can avail of the scheme and its benefits for a period of one year. After that, if the dealer still wants to keep up with the scheme, it can opt for it again. So, the scheme needs to be opted every year, and once that is done, you cannot change this option for that particular financial year.

All that being said about the scheme, we can now move on to the amendments the Government has brought in the scheme.

The first amendment was in the threshold limit for the scheme. Earlier, only the dealers who had a turnover up to Rs. 1 crore could opt for the composition scheme. But then the Government increased this threshold limit up to Rs. 1.5crore. This means a broader scope of eligibility has been created for the taxpayers to get into the composition scheme.

Another amendment was that the scheme was earlier applicable only to the supplier of the goods and not the service providers. But, with the latest amendments in the GST Act, even the service providers are included in the eligibility criteria to opt for the composition scheme. And also this has created a higher scope of eligibility for the taxpayers.

With that being talked about the amendments in the Act, it is also necessary to look to their impacts on the taxpayers.

Impact of Changes in GST on the Taxpayers

These are the two major amendments brought by the GST Act, and these have had a major impact on the taxpayers, which has, of course, been positive. Both the changes have completely been people-oriented and made things more comfortable for the taxpayers. With the increase in threshold limits for registration, the taxpayers have essentially been able to reduce their level of compliance. And with the increase in threshold limit for eligibility for composition schemes as well as the inclusion of service providers in the eligibility criteria, more people can opt for the scheme and avail of its benefits. So, the changes have only contributed to the betterment of the taxpayers.


When we talk as to what is GST Act, we can necessarily conclude that it is a vast and diverse Act. So, there are needs for continuous changes in the Act so that the taxpayers can avail of most of the benefits of GST through positive impacts. And the government has been doing that task amazingly. It has been bringing continuous changes, and all of them have been positive. So, what is needed is to keep supporting so that we can have a great Act governing the indirect taxation regime in the country in the best possible ways.