The eligibility limit for Goods and Services Tax (GST) registration to annual turnover has been doubled to Rs 40 lakh due to which 60% of registered dealers have been excluded. But this will not affect the revenue much to the government.
In March 2018, from 87 lakh registered dealers only 45 lakh dealers are those whose turnover was around Rs 20 lakh and out of which 10 lakh are such dealers whose turnover was up to Rs 40 lakh. The officials said that the changes made are almost the same as the base of registered Goods and Services Tax (GST) payers which is approx. 1.2 crore.
Officials also said that to utilize the credit which is paid in different stages of production, not all the registered dealers have to move back because many of the companies which they sell to might want to be part of the GST ambit.
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To increase the eligibility limit of the registration, which has been set at Rs 40 lakh by the law committee, the Goods and Services Tax (GST) Council has planned to discuss the scheme. But Bihar thinks that is must be increased to Rs 50 lakh. This plan was discussed in the last meeting to lessen the burden of small businesses.
But officials are not fully assured about the need of increasing the eligibility limit most probably for the smaller states whose turnover is less. Before GST was launched, the hill states had eligibility limit of Rs 10 lakh so that the tax base does not reduce which could affect their revenue. Bihar is sent a proposal saying that the presumptive tax for the businesses whose turnover is Rs 50-75 lakh but some of the states are saying that this facility must be given to the smaller taxpayers as they need it the most.
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Another concern is about giving permission of composition scheme for service sector because in this sector only quarterly tax payments are done which are based on the turnover that has to be made. There is a fear for officials because this will lead to the misuse and will relent little revenue.
