After a long wait, finally the Goods & Service Tax (GST) implementation in India has come to next level as the Centre and States have agreed on an annual turnover threshold limit of Rs. 25 lakh, which in simple words means that businesses with annual turnover less than Rs. 25 lakh are outside the scope of GST.
To simplify the implementation it has also been decided that taxpayers with annual turnover exceeding Rs. 1.5 crore would be taxed by Centre and later on share of the states will be disbursed. Similarly taxpayers with annual turnover below Rs. 1.5 crore would be taxed by States and later on share of Centre will be disbursed by States. This simplifies the Dual GST concept for the taxpayers.
Regarding the small dealers with annual turnover upto Rs. 60 lakh can opt for composition scheme (presumptive taxation) where a compounded levy of 1% on annual turnover is implemented, instead of GST at prescribed rate. Also taxpayers opting for composition scheme can’t claim input credit of GST paid.
However no roadmap has been decided by the government regarding the inter-state movement of goods, which attracts Integrated GST, no threshold has been proposed and still its not clear which state would collect GST in such case.
Discussion on revenue-neutral rate (RNR) was also held in the meeting and a small group has been formed to finalise the rate considering the existing rates of State VAT’s and service tax.
Another meeting for further discussion has been scheduled next week by the committee.
From the initial review it can be said that the structure, threshold and composition system so decided is based on current model of state VAT‘s and service tax, however its a milestone for the committee as finally the implementation has move towards next level.