State Finance Ministers Want Lower Threshold of Rs 10 Lakh for Levying GST
The state Finance Ministers today resolved to lower the threshold limit for imposing Goods and Service Tax (GST) from Rs 25 lakh to Rs 10 lakh, and asked the Centre to include the provision for GST compensation in the Constitutional Amendment Bill.
The Empowered Committee of state Finance Ministers on GST also recommended that states be given the legal powers to collect tax from businesses with an annual turnover of up to Rs 1.5 crore.
"About dual control, Empowered Committee decided to recommend to the central government that for threshold of Rs 1.5 crore, Centre will not interfere in assessment, in audit, in other matters. It will be left exclusively to states. But officials from Centre insisted that only administrative control will be given to the states.
"The states insisted that legal powers should also be given to the states to the extent of Rs 1.5 crore so far as CGST is concerned," Empowered Committee Chairman Abdul Rahim Rather told reporters.
The contentious issue of dual control of traders - by both the Union government and state governments - in GST structure, would be that taxpayers with annual turnover of over Rs 1.5 crore would be taxed by the Centre, which will later disburse to states their share.
Those with turnover below Rs 1.5 crore would pay their taxes to states, which would subsequently pass on to the Centre its share.
As per the recommendation, GST would not be imposed on businesses with annual turnover of less than Rs 10 lakh.
Currently the threshold for Value-Added Tax (VAT), it is Rs 10 lakh in most states.
"So far as threshold limit is concerned, it was decided that it should be Rs 10 lakh in respect of general category of states and Rs 5 lakh for special category and NE states," Mr Rather said.
As regards the items exempted from the purview of GST, the committee suggested that they should be mentioned in the Constitutional Amendment Bill. States have already told the Centre that items like petroleum and tobacco would be kept out of GST.
On compensation for phasing out of Central Sales tax (CST), Mr Rather said that Rs 13,000 crore has been pending as on March 2010.
Gujarat Finance Minister Saurabhbhai Patel urged the Empowered Committee to take a balanced view in the proposed dual control by both state and central authorities, along with sustainability of states revenues and ease in compliance for small traders while rolling out the GST.
-
Signature Play: The Classic Cocktail Is Dead. Or Is It?
Classic cocktails are disappearing from India's cocktail menus. But they're still being ordered, taught to bartenders and borrowed from. So, who's really having the last drink?
-
A New Samvat Wishlist: Inclusive Prosperity And Human Development
India has strengthened its economic foundations through infrastructure, digital access and enterprise. Its next growth chapter must deepen productivity, create better livelihoods and widen participation in prosperity.
-
Love, Sex Aur Dhokha: The Audacious Plot To Spy On Jensen Huang
A Taipei dinner, a Singapore chip buyer and a suspected Chinese asset: inside the alleged spy operation that got close to NVIDIA's Jensen Huang.
-
Ten Things I Learnt This Samvat
Patience can be a trap. Cheap stocks can stay cheap. Leverage can wipe you out. What did Samvat 2082 teach us? Niraj Shah writes on 10 lessons from the year gone by.
-
Talking Points This Week: Tech Nerves, FII Buying, And A Faraway Banking Shock
The global markets are not shining this Diwali. The exception in the large markets is, India.
-
Midterm Rally Lasted A Day. The Hard Reality Of A Divided US May Last Two Years | Opinion
Between a contested AI boom, a debt ceiling that arrives in 2027 and a president with every incentive to act alone, the next two years may prove more volatile than the first day's rally suggests.
-
Blue Wave Will Derail the AI Trade but Won't Dismantle the AI Era | Unhedged Position
The Democrats' sweep of the US Congress will see politics collide with economic forces both over the long and short term.
-
It's Time To Take The GST Council's Bet On Trust Global
Payment records can prove India's services exports, and clear, proportionate rules can bring foreign digital sellers into the tax net.
-
Opinion | India at 38: From Innovation Overperformer to Innovation Powerhouse
India now has 453 VC-backed deep science startups, 18 of them late-stage, after 117 percent growth since 2020. Laurus Labs, at USD 9.3 billion, is the most valuable deep science company in any middle-income economy outside China.
