The GST Council had been constituted and a bunch of announcements have been made by the Finance Minister. These are
- GST will apply when turnover of the business exceeds Rs 20lakhs (Limit is Rs 10lakhs for North Eastern States). [Earlier the limit was Rs 10lakhs and Rs 5lakhs for NE states.]
- Service tax was levied by the central government and states do not have expertise in levying and collecting service tax. Centre will continue administer tax on services during the initial phase of GST. It may be passed on to states later.
- States will administer GST for businesses with turnover of Rs 1.5crores or less.
- Both States and Centre will administer GST for Businesses with turnover in excess Rs 1.5 crores.
While the increase in GST threshold limits is a welcome move for small businesses. They can now heave a sigh of relief. This will also allow the government to focus on the big fish. But businesses which provide both goods and services and have turnover of Rs 1.5crores or less, will have to deal with both state and central administration and that may be a compliance hassle in the initial phase.