GST threshold Rs. 20 lakhs for states barring north-east & hill-area states

Highlights of first meeting of the GST Council  held on 23rd September 2016.

1. GST threshold limit to be kept at ₹ 20 lakhs for all states barring the north-east and hill-area states, for which limit been fixed at Rs. 10 Lakh. Threshold limit of Rs. 10 lakhs to be applicable in respect to following states:

1. Arunchal Pradesh 2. Assam 3. Jammu & Kashmir  4. Manipur  5. Meghalya  6. Mizoram 7. Nagaland 8. Sikkim 9.Tripura 10. Himachal Pradesh 11. Uttarakhand

If a taxpayer has a principal place of business in states other than mentioned above, the threshold limit will be Rs. 20 lakhs even if any branch/warehouse is situated in specified states. For Ex: A GST taxpayer’s principal place of business is in Mumbai and it also has a branch/warehouse in Assam then his threshold limit will be Rs.  20 lakhs.

2. All cesses to be subsumed under GST.

3. Separate Law for compensating states on any loss due to GST. Base year for compensation to be FY 16.

4. Cross Empowerment model for assessees having annual turnover exceeding ₹ 1.5 crores.

5. Only 5% of the taxpayers to be covered under audit as against 70-80% under various state laws.

6. State to be compensated if its revenue under GST falls short of the average tax earnings in the best three years out of five years.

7. The council will meet next on September 30 to finalise rules and subsequently on October 17-19 to thrash out the rates.

8. Government will try to finalise the GST Rate on meetings to be held on October 17-19.

9. States to monitor the taxpayers with annual turnover of less than ₹ 1.5 crores and those above that will be monitored  through the new cross-empowerment model. Tax administrators will use a formula to decide which assessees they will audit or register.

9. Single assessing authority, instead of having a dual system of assessment and scrutiny.

10. Taxpayers will be allowed to restrict their interaction to a single tax authority for central GST, state GST and integrated or IGST.

11. Existing 11 lakh service providers registered with the tax department will be assessed by central tax authorities and new ones will be shared with state authorities after due training.



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