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2:36 am - Thursday February 22, 2018

GST Exemption Limit

The first meeting of the GST council has decided that business with an annual turnover upto Rs.20 lakh will be exempted from the Goods and Service Tax. But the threshold will be Rs.10 lakh for 7 North Eastern and four hilly states.

From all practical purposes and economic, trade, commerce industry and general point of view the exemption is just nothing and provides no relief and virtually it is no exemption at all.

The Rs.20 lakh annual turnover means business of Rs.2.50 lakh per month and business of Just one thousand rupees per day. In the present condition a vegetable and fruit seller, a Kiosk shop owner of roadside food stalls have more than Rs.1000 per day sale. At the minimum the exemption limit should have been Rs.30 lakh annual turnover and beyond it.

The GST has come a long way from Congress led UPA Government to BJP led NDA Government promising one tax system for the whole nation, less number of taxes and emergence of national Market. It also raised a high hope not only among the business class but also in the consumer of reduction in cost of goods and services. But the hopes are dashed with the very first decision.

The GST Council in next sitting on September 30 will decide on GST Rules and in next month October 17-19 meeting it will take decision on Tax rates. It is hinted that in the Council meeting the states wanted exemption limit at Rs.10 lakh annual turnover and the Centre proposed Rs.25 lakhs.

The Rs.20 lakh limit decision is compromise formula between the States and the Centre. The GST Act will roll out from the dead line set to 1st April 2017. All the cesses which are being levied now such as Swachha Bharat, Krishi Kalyan etc. will be included under the GST to avoid multiplicity of indirect taxes.

Three option are being considered to give compensation to states for tax revenues losses by the GST. The base will be 2015-16. The council has decided that business turnover upto 1.5 crores of rupees will be within the jurisdiction of State assessment and above Rs.1.5 crores business the authority of the Centre will prevail.

Posted in: Editorial

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