Also decided to increase the threshold limit for registration under the GST for small traders
Seeking speedy implementation of the Good and Services Tax (GST), State finance ministers, on Friday, pitched for a common exemption list so that fewer number of items remained outside the indirect tax net.
“As of now, the exempt list of States contains 96 items, whereas the Centre’s list has 243 items. The empowered panel has arrived at a consensus that 12 of the 96 items contained in the States’ list on which the Centre levies taxes be exempted from Central taxes,” Chairman of the Empowered Committee of State Finance Ministers Sushil Kumar Modi told reporters here.
State finance ministers also asked the Centre to prune its exemption list in a phased manner to match it with that of States.
Mr. Modi said the empowered committee had arrived at a consensus that there should be no dichotomy between the exempt list of States and that of the Centre.
The committee also decided to increase the threshold limit for registration under the GST for small traders, Mr. Modi said. The details would be worked out, he added.
The committee had recommended increasing the threshold limit to Rs.25 lakh turnover, but a consensus regarding this was yet to be reached as many States were yet to study the implications.
The State finance ministers also recommended traders with a turnover of less than Rs.1.50 crore be exempted from dual control, which led to tax overburden. They suggested that only those with a turnover of over Rs.1.50 crore be kept under the tax levying agencies of Centre and States.
A Constitution amendment bill to give affect to the GST is pending in Parliament. Both the Centre and States are engaged in negotiations for early implementation of GST, which will subsume most indirect taxes. Mr. Modi, who is also the Deputy Chief Minister of Bihar, said States were demanding that they should be compensated for five years for their losses on account of phasing out of the Central sales tax.
Asked how long it would take the GST regime to come into effect, Mr. Modi said the onus rested on the Centre.
“We have resolved about 85-90 per cent of the issues, but unless the Parliamentary Standing Committee clears the related bill, the GST will remain a distant goal,” Mr. Modi said.