GST Council : Setting of the turnover threshold limit of 20 lakhs

After we have ridden a bullock cart to reach the GST destination we suddenly found the bullet train on the way. So far we have been used to the slow pace where we could get down, go back, relax and get back to the GST vehicle. We find ourselves entrapped in the superfast machine that will drop us at the GST station on 1st of April, 2017. All the easy going approach is gone and we have only one way to follow in the journey. The GST council and the concerned authorities have to deliberate issues, check the authenticity and take decisions. Any delay would mean a derailment and GST implementation deadline being missed.

Disagreements: There will also be roadblocks. The GST bill is unlikely to be ratified in the Kerela assembly in the legislative assembly session. The Kerela finance minister has indicated that it will come up for discussion only in the budget session that happens in April next year. The GST bullet train cannot be made to stop at small stations to get all people on board. Though it would be good that all states join the bandwagon but it is not essential. The constitutional amendment is already approved and the CGST, IGST and SGST laws are likely to be passed in the winter session of the Parliament. It is inevitable that all states will have to follow the constitution and hence Kerela will not have any choice but to fall in line.

Accomplishments: We must also take pride in the fact that there are some achievements too. The first meeting of the GST council on the 22nd and 23rd of Sep can be termed as successful. Two important landmark decisions were taken. The first one was on the setting of the turnover threshold limit of 20 lakhs below which the GST would not be applicable. There were proposed limits of 10 lakhs, 25 lakhs and even 50 lakhs. It is heartening to note that the consensus on the figure was reached without any voting requirements.

Similarly, the dual control issue has been amicably addressed. The assessment of the taxpayers whose turnover is below the annual figure of Rs 1.5 crore will be done by the state tax authority and the ones above that will come under the new cross-empowerment model. Here, the tax administrators will decide which taxpayer they will register based on a formula. Thus, the taxpayer will have to interact with only one tax authority which is a big relief for them.

Future plan: In the next meeting of the GST council on the 30th of Sept, 2016 to finalise the GST rules. The GST rate is a tricky issue where the meeting has been fixed for Oct 17~19 to thrash out the rates.

With all this action in place and with the progress being made it seems that the government is on track the bullet train to reach the April 2017 destination.

Leave a Reply

Your email address will not be published. Required fields are marked *