Consensus builds up for ₹40 lakh sales threshold for GST registration in all states

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All states, barring hill states, are moving towards a uniform sales threshold of ₹40 lakh for businesses to register for goods and services tax (GST) despite the federal indirect tax body, the GST Council, giving them the choice to retain the current limit of ₹20 lakh.

Kerala, which was so far insisting on GST registration for traders and businesses with ₹20 lakh or more in annual sales, is veering towards raising it to ₹40 lakh. Last week, the state had informed the Council that it was taking a fresh look at its earlier position, one person familiar with the discussions said on condition of anonymity.

All states are expected to inform the Council about their decision on the registration criteria sometime this week.

The idea of liberalizing the registration requirement was aimed at easing the compliance burden of small taxpayers, but it comes with trade-offs. “Now, the chances of both suppliers and buyers going out of the tax net are higher. This could affect revenue receipts,” explained a third official, who also spoke on the condition of anonymity. Field officers see the possibility of big businesses organizing their operations as smaller units with less than ₹40 lakh sales to avoid registration. Such splitting of operations was harder at a lower sales threshold.

Read more at : https://www.livemint.com/politics/policy/consensus-builds-up-for-rs-40-lakh-sales-threshold-for-gst-registration-in-all-s-1548616899802.html