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The States on Wednesday agreed on new threshold limit of ₹ 10 lakh for imposition of Goods & Service Tax (GST) regime, lower from ₹ 25 lakh earlier proposed.
In other words, traders with annual turnover of ₹ 10 lakh and above only will attract GST.
A decision to this effect was taken at the Empowered Committee of States’ Finance Minister meeting here on Wednesday to discuss various pending issues on GST regime. The meeting, however, ended without any clarity on Centre’s stand over the changes suggested by the States on the Constitution (Amendment) Bill.
After the meeting, the Chairman of the Committee Abdul Rahim Rather, who is also the Finance Minister of Jammu & Kashmir, said that the threshold limit for general category States will be ₹ 10 lakh, while it will be ₹ 5 lakh for special category and North Eastern States.
On the issue of dual control, Rather said that the meeting discussed the report by the committee and decided to seek legal power for control of tax administration for business units having annual turnover of ₹ 1.5 crore.
“It was decided to recommend to the Central Government that for threshold of ₹ 1.5 crore, the Centre will not interfere in assessment, audit, and other matters. It will be left exclusively to States,” he said adding that but, officials representing the Centre insisted that only administrative control will be given to the states.
“The States insisted that legal powers should also be given to them,” Rather said.
States also want GST compensation structure to be part of the Constitution (Amendment) bill. Rather said that about ₹ 13,000 crore worth of compensation up to 2010 is pending, while amount for 2011-12, 2012-13 and 2013-14 is yet to be calculated.
States have also proposed to keep the list of exemption goods common for the Centre and States. Currently, exemption list for States’ VAT consist of 96 items, while for Central Excise it is 243.
While the Centre and States seem to agree upon keeping alcohol out of the proposed tax regime, there is no clarity on petroleum products.
GST aims to subsume central indirect taxes such as Central Excise Duty and Service into Central GST (CGST) and various States levies such as VAT and Central Sales tax into States GST (SGST).
The Centre has already announced its intention to bring Constitution Amendment Bill to pave way for introduction of GST in forthcoming Winter Session. This bill was brought in previous Lok Sabha, but lapsed as the previous Central Government failed to evolve a consensus among States.
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