GST exemption limit fixed at Rs 20 lakh
Striking political consensus, the GST Council on Friday said businesses with an annual turnover of less than R20 lakh will be exempt from the goods and services tax (GST). The threshold will be R10 lakh in the north-eastern and hill states.business Updated: Sep 23, 2016 23:08 IST
Striking political consensus, the GST Council on Friday said businesses with an annual turnover of less than R20 lakh will be exempt from the goods and services tax (GST). The threshold will be R10 lakh in the north-eastern and hill states.
“All decisions today were on consensus, there was no need of any voting,” Jaitley said. “All items including cess would be included in GST,” he added.
At the end of the first meeting, the Council headed by finance minister Arun Jaitley also decided that state authorities will have jurisdiction over assessees with annual turnover of less than R1.5 crore. For those with turnover of over R1.5 crore, there would be cross examination by officers from either states or the Centre to avoid dual control.
However, the power for assessment of 11 lakh service tax assessees, who are currently assessed by the Centre, would remain with it. New assessees would be divided between the Centre and states.
All state finance ministers are members of the GST Council.
Meanwhile, Friday’s meeting was a much more amicable affair compared to Thursday’s.
The Council has also decided to keep financial year 2015-2016 as the base year for compensating states in case of any revenue loss to states following GST’s implementation. Decisions regarding revenue projection and compensation formula will be taken in the next meeting on September 30. The rates would be decided on separate meetings on October 17, 18 and 19.
“We will try ad finalise the rates and slabs during our meeting on October 17,18 and 19,”Jaitley said.
A panel headed by the chief economic adviser Arvind Subramanian had recommended capping the GST rate at 18%.
States, however, continued to spar over revenue projection. “How we will arrive at the revenue projection is a concern. We need more data to analyse the revenue growth under the new tax regime,” said Abhishek Mishra, finance minister of Uttar Pradesh. Captain Abhimanyu, finance minister of Haryana, said his state had no concerns as “the Centre has assured compensation in case of any loss”.