Dispur to review GST exemption limit

GST threshold limit for businesses in the State likely to rise from Rs 10 lakh to Rs 20 lakh 

BY OUR STAFF REPORTER

GUWAHATI, Nov 12: Buckling under intense pressure from various trade and industry organizations, the Assam government is contemplating to review the threshold limit of GST for business in the State.

Even though the State government has been under pressure to raise the threshold limit, it is in a fix as to what to do. But thinking on this line has started in Dispur following Union Fince Minister Arun Jaitley’s latest announcement that States are at liberty to increase the GST threshold limit on their own. During the 23rd GST Council meeting held in Guwahati, Jaitley cited the example of Jammu and Kashmir which recently raised the exemption limit for GST.

Sources told The Sentinel that the Fince department will, however, adopt a wait and watch policy on tax implications of the new GST regime for the next few months before reviewing the threshold limit of GST for business. 

Assam has now 1.2 lakh traders registered under GST, of whom around 80,000 are active. Sources said in case the GST threshold limit is raised from the existing Rs 10 lakh to Rs 20 lakh, around 20,000 traders will go out of the tax net.

“Such situation might have negative implication as it will hit direct tax collection, which is around Rs 12,000 crore annually. The State Fince department will alyze all such situations before taking the fil call. Dispur will also wait till the GST regime stabilizes. Once the new tax regime stabilizes, we will be in a position to predict future tax implications and take the right call,” a source said.

The Federation of Industry and Commerce of North Eastern Region (FINER), the apex industry body of the Northeast, has been pressing the Central as well as State governments to increase the threshold limit of GST in Assam and other NE States for the greater interest of trade and industry in the region.

“Small and margil traders from the Northeast, particularly Assam, are in deep trouble due to GST as they have come under its net with an annual turnover of Rs 10 lakh while the threshold limit for exemption in the rest of the country is Rs 20 lakh,” Sandeep Khaitan, one of the directors of FINER said.

Another senior FINER board member RS Joshi said that after the Union Fince Minister’s announcement on threshold limit, the ball is now in the court of the States.

“There should not be any problem as the Centre will be compensating the States for any loss of revenue for 5 years, by which time the GST regime would have stabilized,” Joshi said.

The FINER recently said a good number of investors who set up shop in the State are winding up due to anti-industry refund mechanism by the Centre after rolling out the GST regime.