The Goods and Services Tax Council on Friday decided that businesses that earned upto Rs 20 lakh a year will be exempt from the new tax as both the Centre and states are trying to thrash out issues to
The Goods and Services Tax Council on Friday decided that businesses that earned upto Rs 20 lakh a year will be exempt from the new tax as both the Centre and states are trying to thrash out issues to meet the deadline of April 1, 2017, deadline to roll out GST across the country.
For the Northeast and the hill states, this limit will be set at Rs 10 lakh. These decisions were taken at the two-day meeting of the GST Council that ended on Friday. It also decided that all cesses will be subsumed within the GST.
The GST Council, which is headed by Union finance minister Arun Jaitley and has representatives from all states, also decided that states will have exclusive control over dealers having revenue under Rs 1.5 crore in a year. Those with a turnover of over Rs 1.5 crore would be cross-examined either by officers from the Centre or state to avoid dual control. This “dual control” issue has been a major concern regarding GST. However, the power for assessment of 11 lakh service tax assessees who are now being assessed by the Centre would remain with it. New assessees would be added to the list will be divided between the Centre and the states.
The crucial issue of the GST rate and tax slabs would be decided at its three-day meeting starting October 17. The broad principles for compensating states for any loss of revenue due to the GST rollout were also discussed.
The next meeting on September 30 will finalise the draft rules on implementation of exemptions. The exemption list was also cut down to 90 items from the current 300 goods and services. “All decisions have been taken without a vote,” said Mr Jaitley.
The general consensus at the meeting, he said, was that the compensation to be paid to states for any loss of revenue due to the implementation of the new regime should be at regular intervals. “It should be quarterly or bi-monthly,” he said.
“A higher threshold of Rs 20 lakhs (as against the earlier proposed limit of Rs 10 lakhs) is also good news. Many small-scale traders and service providers would be saved from undertaking GST compliance and it also reduces a substantial burden for the tax authorities to assess small-time dealers,” said Rajeev Dimri, Leader (Indirect Tax), BMR and Associates LLP.
