Question:medium

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

Step 1: Understanding the Question:
We need the new annual turnover limit set by the GST Council for tax exemption, aimed at giving relief to MSMEs.

Step 2: Key Approach:
Compare the earlier threshold with the revised one to see which figure the Council actually settled on.

Step 3: Detailed Explanation:
Before the change, businesses with turnover above 20 lakhs had to register for GST. The Council doubled this limit to 40 lakhs for suppliers of goods, letting more small businesses stay outside the compliance requirement. Figures like 30 lakhs or 60 lakhs do not match the limit that was actually approved.

Step 4: Final Answer:
The GST Council raised the exemption limit to 40 lakhs.
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Approach Solution -2

Thinking about the purpose behind the change, giving genuine relief to micro, small, and medium enterprises, helps judge which figure fits best.

  1. 20 lakhs: Keeping the limit here would offer no additional relief at all, since this was already the existing threshold, so it cannot be the answer to a question about an increase.
  2. 30 lakhs: A rise to this level would be a modest step up, but it is not the figure the Council actually settled on for this measure.
  3. 40 lakhs: A meaningful jump from the earlier limit, enough to pull a good number of small businesses out of compulsory GST registration altogether, matching the scale of relief the Council intended and actually approved.
  4. 60 lakhs: A jump this large would go beyond the relief actually granted and overstates the approved figure.

Weighing the scale of relief intended for MSMEs against each figure points to 40 lakhs as the one that was actually approved.

Therefore, the correct answer is 40 lakhs.

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