GST applicability threshold fixed at Rs 20 lakh

The Goods and Services Tax Council held its second meeting on Friday, and reached a consensus on one of the key pending issues, the exemption limit. 

The GST Council, which has representatives from all the states and two union territories, fixed the threshold for GST applicability at Rs 20 lakh. This is Rs 5 lakh less that the Rs 25 lakh that was being considered. 

On Thursday, the GST Council, in its first meeting, had failed to reach a consensus on GST exemption limit. 

For North-Eastern states, the threshold limit was fixed at Rs 10 lakh, twice of the Rs 5 lakh that was under deliberation. In Thursday's meeting there were considerations of fixing the GST exemption limit at Rs 10 lakh or Rs 25 lakh. 

The exemption list has also been cut down to 90 items from the current 300 goods and services, Zee Business said in an alert. 

In its second meet, the GST Council also took up the issue of compensation to the states that are expected to lose revenue when the new GST is levied. 

The GST Council, chaired by Finance Minister Arun Jaitley, decided that 2015-16 will be the base year to calculate the compensation to states. The compensation would be provided to the states at regular intervals. 

The GST Council is expected to meet again from October 17 - 19 to discuss the rates. 

It will discuss the details of the exemptions in a meeting on September 30.