A employee walks between shelves stacked with boxes of shoes at a store in Delhi. Photographer: Anindito Mukherjee/Bloomberg

GST Council May Consider Relief For Small Taxpayers As It Meets Today

The Goods and Services Tax Council may consider giving more relief to small taxpayers this week, a government official told BloombergQuint on the condition of anonymity. Last week, the panel had allowed them to file quarterly returns and increased the threshold for registration under the indirect tax regime in the hill states.

The panel will meet on Saturday to consider over 130 recommendations given by various stakeholders, the official said.

The suggestions include allowing taxpayers to make inter-state supplies up to a threshold of Rs 20 lakh without having to register under the GST. Currently, taxpayers must sign up for the tax if they make inter-state supplies even if their annual turnover is below Rs 20 lakh.

The official quoted earlier said one of the suggestions include distributing half or the central government’s entire share of GST as refund to taxpayers with turnover of up to Rs 1.5 crore. This is in line with the pre-GST system where taxpayers with a turnover of up to Rs 1.5 crore didn’t have to pay excise duty.

The council may increase the audit limit for taxpayers to Rs 5 crore from the current Rs 2 crore, the official said.

Other key suggestions:

  • Allow quarterly tax payments for small businesses.
  • Increasing the threshold for registration for suppliers on e-commerce platforms—who must sign up for the GST—to Rs 20 lakh.
  • Make Rs 20 lakh as the threshold for recipients of services on which tax needs to be paid on reverse-charge basis like legal and goods transportation services.

Some of these measures would help ease the compliance burden for small taxpayers, said Abhishek Jain, indirect tax partner at EY India, told BloombergQuint. “While the positives remain, the government may have to evaluate the revenue loss and compliance issues before implementation of these benefits.”