NEW DELHI: Ministers from some of the Congress-ruled states on Thursday opposed a move to double the GST threshold for the goods segment, before agreeing to it due to absence of support from Opposition-governed states in what was reminiscent of last month’s GST Council meeting, when some of them had objected to attempts to reduce the levy for consumers.
When the meeting began, Chhattisgarh finance minister T S Singh Deo, who was attending his first GST Council meeting, along with Puducherry chief minister V Narayanasami opposed the recommendations of a ministerial panel to raise the registration limit, sources told TOI. Soon, Kerala finance minister Thomas Isaac joined in. The ministers from the Opposition parties suggested that the limit should be retained at Rs 20 lakh for the large states, and Rs 10 lakh for the hill states. Narayanasami argued that a union territory like Puducherry would lose a bulk of its taxpayer base. The other Congress-ruled states such as Punjab and Karnataka were not inclined to support the move, which many saw as political posturing.
In contrast, some of the BJP-ruled states suggested that the limit should be hiked to at least Rs 50 lakh, with a few going to the extent of recommending that only businesses with an annual turnover of more than Rs 75 lakh should need to register. This too was seen as an extreme position.
After a long discussion, finance minister Arun Jaitley and his colleagues in the GST Council finally settled on doubling the limit to an annual turnover of Rs 40 lakh with a rider that states and the two UTs that are part of the body — Delhi and Puducherry — would be given a week to decide individual threshold.
“It is a one-time exception, where states can opt for a lower threshold compared to Rs 40 lakh,” Jaitley told reporters after the meeting. He also pointed out that Jammu Kashmir and Assam, which had been given the flexibility to opt for a Rs 10 lakh threshold instead of Rs 20 lakh for the others, had opted to increase the registration limit.
“During the last two meetings, we are seeing a trend of the Opposition-ruled states taking a position that may not necessarily be pro-business or pro-consumer. It’s a political posture,” said a minister from a BJP-ruled state. His party colleague from another state said that there is unanimity inside the meeting room although some of the states speak a different language outside.