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If the states do not want to raise the threshold, they can communicate to us within the next few days and then accordingly they will be kept out of it, Ajay Bhushan Pandey, Revenue Secretary, tells ET Now.

Edited excerpts: 

What led to raising the GST threshold from Rs 20 lakh to Rs 40 lakh?

The GST council has always been very sensitive to the requirements of the businesses and particularly the small businesses because the compliance requirement for a business having a turnover up to Rs 20 lakh and subjecting them to the entire compliance requirement. 

Keeping that in mind, a decision has been taken to raise this threshold from Rs 20 lakh to Rs 40 lakh because it was observed that businesses in this category actually pay very less tax. At the same time, the cost of compliance is high if they have to file several returns and they end up perhaps spending more money in doing compliance than paying the actual tax. 

Is this across-the-board or is it something that the states are going to decide?

 

Some states said that they will need some time to think about this proposal and therefore the option has been given that if the states do not want this, they can communicate to us within the next few days and then accordingly they will be kept out of it. 

Would that not lead to a disparity of sorts?

No. We do not think that it will lead to disparity because anyone doing an interstate business will have to get registered in any case. Anyone who wants to be part of the input credit chain, will have to register. It is only for those businesses which are doing business to consumer (B2C) directly and also doing intra-state business. 

It is going to be an intra-state affair. We do not see any impact because of different rates in different states. Even today for example, the limit of Rs 20 lakh was there for the whole country. But some special category states like Uttarakhand, the north eastern states, have a lower limit of Rs 10 lakh. We are already have differential rates in some manner and a few states opting for lower limits would not create much problem. 

We are in the middle of the budget making exercise. GST collections in the last month saw a dip of about Rs 94,000 crore. How big a worry is it? Going forward, what kind of steps will be taken because the e-way bill is in place, anti-evasion measures are also being considered. What will be done in the days to come to ensure that this collection mopup is moved up higher?

So far as the tax collection effort is concerned, if you can reduce this compliance requirement, then the businesses feel more motivated to join in this system. We have also reduced the rates on various items. There is also the presumption that because of the lower rate, the tax evasion will be lesser and then we will get the more revenue. 

Published On : 11-01-2019

Source : Economic Times

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