Rules To Be Finalized For Entities With Under Rs 20L Turnover.
The government is planning an easier set of compliance norms for small businesses with annual turnover of under Rs 20 lakh as it seeks to widen the tax base to plug loopholes and make the goods and services tax (GST) more broad-based.
The move comes shortly after PM Narendra Modi triggered a debate about registering those below the current threshold of Rs 20 lakh. Earlier this month, Modi had urged tax officers to ensure that benefits of GST reach the common man and even small traders with a turnover below Rs 20 lakh are registered under the new tax regime.
While large companies are already registering their sub vendors, many of whom are below the prescribed threshold, several are still left out, resulting in a burden on the large entities. For the benefit of GST to flow at every stage of the manufacturing and distribution chain, everyone from the raw material supplier to the component maker, transporter and the packing material supplier has to be registered, many of whom may not have annual sales of Rs 20 lakh.
At the same time, the government recognises that the current mechanism may be cumbersome. “It should be like Saral (the income tax form), which should be a single-page form with only the sales and purchase details to be furnished,“ a senior government official, who did not wish to be named, told TOI.
The new compliance mechanism is being worked out by the Central Board of Excise and Customs but it is still at conceptualisation stage. Based on the plan, rules will be finalized by the GST Council.
Another official said the idea is to ensure that those registered under GST and doing business with non-registered entities have a clear database of their business links. “The idea is not to harass them but get a better picture of these businesses and also help them get the benefit of GST in future,“ said the official.
Source: Sep 19 2017 : The Times of India (Lucknow)