Question:
In a major relief to micro, small and medium enterprises, the GST Council has recently increased the tax exemption limit per annum to:
In a major relief to micro, small and medium enterprises, the GST Council has recently increased the tax exemption limit per annum to:
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For competitive exams, remember both the old and the revised limits — questions often test recent policy changes.
Updated On: Jul 15, 2026
- 20 lakhs
- 30 lakhs
- 40 lakhs
- 60 lakhs
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The Correct Option is C
Approach Solution - 1
The GST Council periodically revises tax exemption limits to support small businesses and reduce compliance burdens. In a recent move aimed at providing relief to micro, small, and medium enterprises (MSMEs), the annual turnover threshold for GST registration exemption was increased from \rupee 20 lakhs to \rupee 40 lakhs for suppliers of goods. This change allows smaller businesses to avoid the complexities of GST compliance and focus on growth.
This limit applies to most states, while certain special category states have different thresholds. Options (A) and (B) reflect earlier thresholds, and (D) overstates the exemption limit.
This limit applies to most states, while certain special category states have different thresholds. Options (A) and (B) reflect earlier thresholds, and (D) overstates the exemption limit.
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Approach Solution -2
The question asks what annual turnover limit the GST Council raised the tax exemption threshold to for MSMEs. Let's check each figure.
- 20 lakhs: This was the earlier threshold before the revision, so it does not reflect the new, increased limit the question is asking about.
- 30 lakhs: This figure was never adopted as the official threshold by the GST Council.
- 40 lakhs: The GST Council raised the annual turnover threshold for GST registration exemption from 20 lakhs to this figure for suppliers of goods, easing compliance for smaller businesses.
- 60 lakhs: This figure overstates the revised limit that was actually approved.
Since the Council doubled the earlier 20 lakh threshold, the correct revised limit is the third figure listed.
Therefore, the correct answer is 40 lakhs.
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Approach Solution -3
Comparing the earlier threshold with each proposed new figure, and checking which change actually matches what the GST Council approved, narrows this down.
- 20 lakhs: This was the threshold before the revision, so it describes the old limit rather than the new, increased one the question asks about.
- 30 lakhs: This figure was never adopted as the Council's approved threshold for this relief measure.
- 40 lakhs: The Council raised the exemption threshold for suppliers of goods to this figure, exactly double the earlier limit, easing the compliance burden for smaller businesses.
- 60 lakhs: This figure goes beyond what was actually approved, overstating the size of the relief granted.
Since the revision doubled the earlier 20 lakh limit, the matching new threshold among the options is 40 lakhs.
Therefore, the correct answer is 40 lakhs.
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[Col. Wedgwood, MP, speaking in the British Parliament, 22 December 1919]
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