GST COUNCIL SETS EXEMPTION THRESHOLD FOR TAX AT RS.20 LAKH
The Goods & Services Tax (GST) Council has decided that businesses in the Northeastern and hill states with annual turnover below Rs.10 lakh would be out of the GST net, while the threshold for the exemption in the rest of India would be an annual turnover of Rs.20 lakh. The States would have sole jurisdiction over assessees (currently in the Value Added Tax [VAT] net at present) having a turnover of Rs.1.5 crore or less, while the administrative control of businesses with a turnover exceeding that limit would be jointly with the Central and State governments Abhishek Mishra, the Minister representing Uttar Pradesh, called for fixing the exemption threshold at Rs.10 lakh. He argued against a preliminary proposal for fixing it at Rs.25 lakh on the grounds that at that level the State could lose 7.1 per cent of its revenue. Delhi Deputy Chief Minister Manish Sisodia, and members from Tamil Nadu and some other States supported the proposed threshold level of Rs.25 lakh. The Council also decided that the existing 11 lakh service tax assessees will continue to be under the jurisdiction of the Centre. Since the GST will allow the States to also tax services, over time the revenue officials in the States will be trained after which they will begin assessing assessees in the services sector. The Council would reconvene on September 30 to finalise the categories of goods and services that would be exempt from the GST. After that, it would meet on October 17, 18 and 19 to fix the slabs and rates at which the GST would be paid by consumers, Mr. Jaitley said.