NEW DELHI: 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 subvendors, 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 rgistered, many of whom may not have annual sales of Rs 20 lakh.
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.
