Web
Analytics Made Easy - StatCounter
GST: threshold raised for suppliers of goods in most States - GST Station

GST: threshold raised for suppliers of goods in most States

GST: threshold raised for suppliers of goods in most States

    Kerala, Telangana to retain existing trigger for mandatory registration

    From April 1, all the States barring Kerala and Telangana, and two Union Territories (with assemblies), will have higher annual threshold limits for mandatory registration for GST for goods suppliers. There is no change in the limit for service providers.

    According to information available with the Finance Ministry, 18 States and two UTs have exercised an option to revise the annual threshold limit; for nine States, the option was deemed to have been exercised.

    Two UTs and all the 29 States were asked to select their option — whether to raise the limit or maintain status quo. It was a one-time exercise meant mainly to benefit micro, small and medium enterprises (MSMEs.)

    GST Council decision

    The GST Council, in its meeting on January 10, had decided that there would be two threshold limits for goods suppliers — ₹40 lakh (for the bigger States apart from Himachal Pradesh, Assam and J&K) and ₹20 lakh (for the seven North Eastern States apart from Uttarakhand and Puducherry). At present, these limits are ₹20 lakh and ₹10 lakh, respectively.

    It was also decided that the States would have a week to decide on one of the two limits. The threshold for registration for service providers would continue to be ₹20 lakh, and in the case of Special Category States, ₹10 lakh.

    According to a senior Finance Ministry official, the Kerala government had said it would keep the threshold limit at ₹20 lakh, but subsequently said it was still under consideration. “No further communication was received from them,” he said. Similarly, the Telangana government said it would maintain status quo “till a decision is taken by the Chief Minister”.

    Meanwhile, another Finance Ministry official clarified that the States have time till March 31 to select their option and inform the Centre about it.

    Further complications

    Experts feel the new limit may bring in some complications, and small businesses may need advice from experts before deciding on whether to avail this exemption limit or continue to be in the GST regime. The limit is not applicable for businesses selling goods inter-State.

    Harpreet Singh, Partner at KPMG, noted that having variable limits across States goes against the very idea of having ‘one nation one tax’. “States not accepting the increased threshold seem to be in fear of loss of revenue. A proper analysis may allay such fears,” he said.

    Source- Business Line.

COMMENTS

WORDPRESS: 0
DISQUS: 0