Moving on the fast track to roll out the new indirect tax regime from April 1, GST Council on Friday fixed the annual turnover limit for exemption at Rs 20 lakh and resolved that all cesses will be subsumed in the GST.
While the next meeting of the Council on September 30 will finalise draft rules on granting exemptions, the GST rate, and tax slabs would be decided at its three-day meeting beginning October 17.
At the end of the first meeting, the Council headed by Finance Minister Arun Jaitley concluded that the state authorities will have jurisdiction over assessees with an annual turnover of less than Rs 1.5 crore. Those with the turnover of over Rs 1.5 crore, Jaitley said there would be cross-examination either by officers from the Centre or state to avoid dual control. However, the power for assessment of 11 lakh service tax assessees who are currently assessed by Centre, would remain with it. New assessees which would be added to the list would be divided between the Centre and states.
Jaitley said while the annual exemption threshold for levy of GST would be Rs 20 lakh, it would be Rs 10 lakh in the north-eastern and hill states. “All items including cess would be included in GST,” he added.
Adding the Council is working on a compensation law and draft compensation formula. The base year for calculating compensation would be 2015-16 and the formula for payment of compensation would be deliberated between the state and Central authorities.
The officials will give a presentation with regard to the compensation formula which can be adopted at the next meeting of the Council on September 30. “All decisions that are made by the GST Council were taken on the basis of consensus,” Jaitley added.