Ball now in govt’s court over `40 lakh exemption limit
13th January 2019, 03:52 Hrs
The decision of Goods and Services Tax (GST) Council to hike the exemption limit from Rs 20 lakh yearly turnover to Rs 40 lakh might have brought a cheer to small businesses, but this ray of hope will materialise into something positive only if the State government decides in favour of it.
Union Finance Minister, Arun Jaitley, has given option to all States to increase the GST exemption limit from Rs 20 lakh to Rs 40 lakh for small businesses. This means that State governments may or may not increase the exemption limit depending upon their situation.
A number of industry representatives felt that Goa government should increase the GST exemption limit to Rs 40 lakh. Their rationale is by doing so the government will reduce the administrative burden of small businesses and at the same time its loss in terms of tax revenue will not be significant.
Rajkumar Kamat, executive director, BNI (Business Network International)-Goa, said, “I think the State government should go ahead and increase the GST exemption limit to Rs 40 lakh. The number of small tax-payers may be huge, but overall the amount of tax revenue they contribute is not significant.”
Kamat says, “This announcement is a boon for small businesses. If government increases the exemption limit, then administrative costs, which small businessmen incur in complying with GST, will greatly reduce.”
It is true that a number of small businessmen in Goa have found it difficult to comply with GST. Whether it is about changing accounting software or running behind a professional for filing returns, small businessmen have complained that they have to spend too much time in GST compliance.
Tax experts were of the opinion that there is a catch in it as well. The State government may decide to introduce reverse taxation, which means that if a buyer purchases an input from a seller, who is not registered with GST for having less than Rs 40 lakh turnover, then the buyer will
BIG ISSUES FOR SMALL BIZMEN