6 States opt for Doubling of Threshold for GST Registration
The 32nd meeting of the GST Council that was held recently on 10th January 2018 at New Delhi had introduced several remarkable measures with regard to increasing of the threshold limit of annual turnover for GST registration.
The GST council in its 32nd meeting had surprisingly recommended that the Threshold limit for GST Registration shall be doubled to â‚¹40 Lakhs. The threshold limit was hitherto kept at â‚¹20 lakhs. In this regard, the Threshold limit for GST Registration was to be kept at â‚¹20 lakhs for the North Eastern States and all the Hilly regions of India.
However, the council had given states an option to decide on selecting for one of the threshold limits within a week’s time.
It has now come that 6 states have already given their approval for doubling the threshold limit. This has come just a week after the 32nd GST Council meeting had taken place and had taken the move aimed at lowering the compliance burden on small scale businesses,
#1. Which all states have opted for doubling of Threshold for GST Registration?
Very interestingly, 6 states have positively responded to the Centre’s decision of raising the Threshold limit for GST Registration shall be doubled to â‚¹40 Lakhs. Those 6 states are as follows-
- Jammu & Kashmir
- Imperatively, the first one to agree to the Centre’s demand is Chhattisgarh. The state government of Chhattisgarh had initially voted against raising the limit. It had argued that the revenues would be adversely impacted if the threshold limit would be raised.
- More interestingly, the hill states Jammu & Kashmir and Assam have also opted to raise the limit. Importantly, these states had the option to remain in the lower threshold, given that they are hill states and require more revenue.
- Previously, when these 2 states were given the option to impose GST registration and charge GST only on businesses with turnover up to â‚¹10 lakh, they had opted for a higher threshold limit of â‚¹20 lakh.
#2. When will the Threshold for GST Registration be raised?
- As of now, Kerala is one such state that has opted to remain under the lower threshold of â‚¹20 lakh for GST Registration. The other states are still in the process to finalise their decision regarding threshold limit.
- The states and the Centre have hence, decided to postpone the deadline by one more week.
- Now any decision regarding raising of Threshold for GST Registration can now be taken only after the 26th January.
#3. How will the decision to raise the Threshold impact the nation?
- The decision to double the limit could result in about 20 lakh people out of the total of 1.2 crore entities having GST Registration moving out of the GST ambit.
- However, the government also believes that all those businesses will not move out as they are still part of a manufacturing chain.
Moreover, large companies that buy from them, will still need them in manufacturing and sales.
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