The Goods and Services Tax (GST) Council is chaired by the Union Finance Minister and has Minister of State in charge of revenue and state finance ministers as members.
The two-day meet of the GST Council beginning on Thursday is likely to take up the discussion on issues of dual control and threshold with states demanding that they be given the legal and administrative power for imposing tax on entities with turnover of up to INR 1.5 crore.
In their last meeting with Jaitley on July 26, states had made it clear that small businesses with turnover of INR 1.5 crore and below should be taxed only in the hands of state.
In the GST structure, while the states have proposed that taxpayers with annual turnover of over INR 1.5 crore should be taxed by the Centre, which will later disburse to states their share.
Those entities with turnover below INR 1.5 crore would pay their taxes to states, which would subsequently pass on to the Centre its share.
Further, the Centre has proposed that small traders having annual turnover of up to INR 20-25 lakh can be exempted from GST, but states have demanded that the limit be kept at INR 10 lakh. The same limit should be INR 5 lakh for special category and NE states.
Currently, the threshold for Value-Added Tax (VAT) is INR 10 lakh in most states.
Thursday’s meeting, according to sources, is also likely to select a Vice Chairman for the Council who would be one of the state finance ministers.