GST Council sets threshold limit at Rs 20 lakh; GST rate to be decided in October

The GST Council decided the annual turnover limit for exemption at Rs 20 lakh and stated that all cesses will be subsumed in the Goods and Services Tax (GST).

The final drafting of rules on granting exemptions will be held in next meeting on September 30 will finalise draft rules on granting exemptions.

The GST rate and tax slabs will be decided next month, during the October 17-October 19 meeting.

At the end of the first meeting, the Council headed by Finance Minister Arun Jaitley decided that the state authorities will have jurisdiction over assessees with annual turnover of less than Rs 1.5 crore.

Those with 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.

Talking to reporters after the meeting, 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," Jaitley said, 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 today by the GST Council were taken on the basis of consensus," Jaitley said.