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

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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
Table 4: Threshold LimitsEmpoweredCommitteeSGST: Gross annualturnover of Rs.10 lakhboth for goods andservices for all the Statesand Union TerritoriesCGST:Separate thresholds forgoods and servicesGoods: Rs.1.5 crore andthe Services: Rs. 10 lakh.Task Force (13 th FC)Threshold: Annualaggregate turnover(excluding both CGSTand SGST) not to exceedRs.10 lakh.Those below thethreshold limit mayregister voluntarilyThreshold exemptionlimit should be uniformfor both CGST and SGSTand across States.Small dealers withannual aggregateturnover of goods andservices between Rs.10lakh to Rs.40 lakh mayopt for a compoundedlevy of one percent.13th FinanceCommissionA threshold of Rs. 10lakh and a compositionlimit of Rs. 40 lakhSales of goods of localimportance will fall withinthese threshold limits,thus keeping them out ofthe ambit of GST.The Empowered committee considers separate thresholds forgoods and services and for SGST and CGST. The Task Force and theThirteenth Finance Commission go for a uniform threshold. The ECconsiders gross annual turnover whereas the Task Force refers toturnover net of CGST and SGST.Exemption ListsThe Task Force suggests that the Centre and the States should draw up acommon exemption list which should be restricted to the following:21
Page 6: with mobile firms, Wellisch (1995)
Page 12 and 13: With a reasonable change in the rel
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Page 18 and 19: Reduction of indirect tax rates led
Page 20 and 21: 4. THE GST: THREE VERSIONSThe basic
Page 22 and 23: Table 2: Central and State Taxes to
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Page 40 and 41: tonne on domestically produced and
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Page 44 and 45: GoI (2005), A White Paper on State-
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Accounting for India's Forest Wealth - Madras School of Economics

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