Accounting for India's Forest Wealth - Madras School of Economics

Table 3: Mechanism of handling Inter-State TransactionsEmpoweredCommitteeIntegrated GST (IGST)Centre to levy IGSTwhich would be CGSTplus SGST on all inter-State transactions oftaxable goods andservices with appropriateprovision forconsignment or stocktransfer of goods andservices.Centre to transfer to theimporting State the creditof IGST used in paymentof SGST.Task Force (13 th FC)Modified Bank modelAll inter-statetransactions in goodsand services to be zerorated using the ModifiedBank Model. Theconsignment sales andbranch transfer shouldbe similarly treated.13th FinanceCommissionAny model meeting thecondition of zero-ratingof export can beconsidered.Threshold LimitsKeeping in view the compliance cost and administrative feasibility, smalldealers (including service providers) and manufacturers should beexempted from the purview of both CGST and SGST if their annualaggregate turnover (excluding both CGST and SGST) of all goods andservices does not exceed Rs.10 lakh. However, like in most othercountries, those below the threshold limit may be allowed to registervoluntarily to facilitate sales to other registered manufacturers/dealers,limit competitive distortions and avoid inequities. Further, the thresholdexemption limit should be uniform for both CGST and SGST and acrossStates. With a view to reducing administrative and compliance burden,small dealers with annual aggregate turnover of goods and servicesbetween Rs.10 lakh to Rs.40 lakh may be allowed to opt for acompounded levy of one percent, each towards CGST and SGST.However, no input credit should be allowed against the compounded levyor purchases made from exempt dealers (Table 4).20