Moving towards rolling out GST from 1st April 2017, the first GST council meeting was held on 22nd & 23rd September 2016.The GST Council, which is headed by Union Finance Minister Arun Jaitley, includes representatives of all the 29 states and 2 union territories. In the first meeting, the members discussed several issues related to composition scheme, threshold exemption limit, dual control over assesses and base year for calculating compensation for revenue loss.
It was decided that a trader having gross turnover of Rs. 50lakh would be eligible to opt for composition scheme and would be required to pay tax @ 1-2% of their total turnover.
In the post meeting press conference, Finance Minister Arun Jaitley also declared two threshold exemption limits for different regions of the country. The threshold exemption limit for north eastern and Hilly States will be Rs. 10lakhs and Rs. 20 lakhs has been fixed for rest of India.
The third important issue discussed in this meeting was dual control over assessees. A business with annual turnover of Rs. 1.5 crore would be assessed by state authorities, and those having annual turnover more than Rs. 1.5 crore would be assessed either by Centre or the State Government according to their risk assessment. (This is a case of cross empowerment). It was also decided that existing 1 lakh Service tax payers/ assessees would be controlled or assessed by the Central Government for the time being.
The last topic discussed was calculation of compensation amount for revenue loss of the states. Finance Minister Arun Jaitley explained that one of the options discussed was fixation of Financial year 2015-16 as the base year for calculation of compensation for revenue loss incurred by the States. Another alternative was taking the best revenue of 3 years out of last 5 years to calculate the average revenue and then add a yearly 12% hike on the average so calculated. Compensation is proposed to be paid at regular basis, either quarterly or bi-monthly. Final decision on this matter would be taken in future meetings.
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