Centre against `10-lakh GST threshold, wants a fresh look

The Centre is against keeping the threshold limit at Rs 10 lakh for levying the Goods and Services Tax (GST) and wants the committee on dual control to take a final view on the matter after detailed discussions.

The Centre in a communication to the state Finance Ministers has suggested that the meeting of the Committee on Dual Control, Threshold and Exemptions be convened at the earliest for ‘detailed discussion and analysis’ of the issues concerning the threshold limit.

It has argued that the limit be kept high as the cost of collection of revenues from small traders and dealers is disproportionately high as compared to the revenue collected from them.

Quoting an analysis, the Centre said: ‘States are collecting just 2 per cent of their revenue from traders/ dealers having their annual turnover between Rs 10 lakh and Rs 25 lakh, while this group comprises nearly 60 per cent of all their tax payers.’ Moreover, it added, keeping the threshold limit at Rs 10 lakh would mean that any dealer with a daily turnover of Rs 2,800 would come under the GST net.

While the Centre is of the view that the threshold for levying Central GST (C-GST) and the State GST (S-GST) be kept at annual turnover of Rs 25 lakh, some smaller states want it to be at Rs 10 lakh.

The Empowered Committee, however, is in favour of keeping the limit at lower level, meaning that any business establishment with an annual turnover of Rs 10 lakh will come under the ambit of GST.