Arun Jaitley addresses a press conference after GST Council meeting in New Delhi. (Source: PTI)
7 years ago
Jan 11, 2019
The Goods and Services tax council is schedules to meet today for the 32nd council meeting, which is chaired by Finance Minister Arun Jaitley and comprises his state counterparts. Catch all the live updates here!
I think it a bold step for the government to raise the threshold limit to Rs 40 lakh for the taxpayers and that would take away almost 50-60 percent of the total registered filers from the tax bracket and that makes sense because the total tax they are collecting from this tax bracket is equal to the cost they are incurring to collect it. I think it is just about 2-3 percent of the total revenue.
We have only estimated the outer limit, say if 50 percent of dealers go out of the system; then the revenue implication could be Rs 2,000 crore-Rs 3,000 crore. But that’s only an estimation & the actual amount could be much lower
The moment a taxpayer opts for Composition Scheme, he will have to pay tax on the entire value, said Ritesh Kanodia, partner at law firm Dhruva Advisors.
By expanding Composition Scheme, the Government is trying to help small tax payers who are not in a position to file returns in time.
It's an attempt to match the pre-GST regime.
Downside is that they pay tax at the composition rate and don't get to claim credit.
Effective April 1, the GST exemption threshold has been raised from Rs 20 lakh to Rs 40 lakh. For hilly states and those in the North East, the threshold has been doubled to Rs 20 lakh.
These states will now be able to choose if they want to keep the GST exemption limit at Rs 20 lakh or Rs 40 lakh, Jaitley said.
"Rs 40 lakh will be the exemption limit for all states, and Rs 20 lakhs for NE and hill states with a caveat that they can opt for higher threshold," he added.
The raised exemption threshold will allow around 20 lakh taxpayers to opt out of GST if they chose to.
A group of ministers - set up in early October - was tasked with revisiting the tax structure of different categories of restaurants with the aim of rationalising or reducing the rates, apart from making composition scheme more attractive for businesses.
Headed by Assam Finance Minister Himanta Biswa Sarma, the GoM had recommended that the threshold limit of the composition scheme, that allows small businesses to pay taxes at a lower rate without getting any input tax credits, be raised to Rs 1.5 crore from Rs 1 crore currently.
50 lakh turnover & 6 % tax rate for service providers in a new Compostion scheme in #gst.Again Chattisgarh & Congress ruled states wanted 8 % GST.Outside Congress say lower tax rates & in meeting fight for higher tax rates.
The registration threshold for GST has been increased to Rs 50 lakh, Andhra Pradesh’s Finance Minister Y Krishnudu said on the sidelines of the meeting. As of now, entities fall under the gambit of GST if their turnover is Rs 20 lakh or above.
The finance minister-led council is now discussing the GST rate on properties which are under construction, he added.
