: GST Council should raise exemption threshold to Rs 1.5 crore: GTRI #FinanceIndia #StockMarketNEWS #Business New Delhi : The Goods and Services Tax Council should consider raising the GST exemption

@StockMarketNEWS Mon 20 Feb, 2023

Posted in: #FinanceIndia #StockMarketNEWS #Business

GST Council should raise exemption threshold to Rs 1.5 crore: GTRI #FinanceIndia #StockMarketNEWS #Business
New Delhi : The Goods and Services Tax Council should consider raising the GST exemption threshold to Rs 1. 5 crore annual turnover and also do away with the requirement of state-wise registration, which would help ease compliance, economic think tank GTRI said on Friday.

The GST network has over 1. 4 crore registered taxpayers, making it the largest global platform for indirect taxes.

“The GST Council now needs to consolidate gains by making compliance easy,” the Global Trade Research Initiative (GTRI) said, while recommending seven reforms for next phase of transformational growth.

The think tank suggested increasing the GST exemption limit to Rs 1. 5 crore, which it feels will be a game changer for India’s MSME sector and set them on the path to job creation and growth.

Currently, registration for GST is optional for firms with an annual turnover of less than Rs 40 lakh for goods and Rs 20 lakh for services.

“Firms with less than Rs 1. 5 crore annual turnover account for 84 per cent of total registrations but contribute less than seven per cent of the tax collected. The new limit would reduce the load on the GST system, which will deal with less than 23 lakh taxpayers in contrast to 1. 4 crore now,” GTRI said.

The reduced load-on system will allow the GSTN to introduce an invoice-matching concept, resulting in 100 per cent compliance and solving the problem of fake invoices and tax theft. The increased tax collection will adequately compensate for the 7% tax loss, it added.

It also suggested doing away with state-wise registrations. Today, if a firm does business in ten states, it must obtain ten GSTINs and maintain a separate account for each. The GST rules set a restriction on the use of available credit.

For example, if a firm has an extra SGST credit in Maharashtra, it cannot use it to pay SGST dues in Karnataka or CGST dues to the central government, GTRI said.

“This restriction results in capital blockage. Essentially, GST has converted one firm into ten independent entities. This defeats the one nation, one tax concept,” it added.

It also suggested setting up of GST Appellate Tribunals (GSTAT) quickly and with the mandate for time-bound disposal of cases. The government has issued a large number of notifications on rates, processes, functioning of input tax credits, and other aspects of GST. Many of these are subject to diverse interpretations.

Today, in the absence of tribunals, if a firm is not happy with the decision of GST commissioners/appellate authorities, it has to approach High Courts, which are already overburdened. Any delay means locking up of business capital, it added.