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      Tax is defined as compulsory exaction of money by the public authorities (Government) for public purposes enforceable by law. Goods and Services Tax (in short GST) refers to a tax that is levied on the activity of supply of goods or services. Supply includes sale, transfer, barter, rental, exchange, etc. It is an indirect tax collected from public through the people who carry on business of supply of goods or of services or both. A businessman, in the capacity of supplier, collects tax from recipient of goods or services and pays it to the Government.

     For a given period of time, the word "turnover" is defined as the aggregate of values of all goods and services supplied by a businessman during such period. Where turnover of a businessman is computed for one calendar year or a financial year or for any other period of twelve consecutive calendar months, the turnover is called annual turnover. Quantum of annual turnover is considered the status of business and the status of a businessman. Big or small businesses may be distinguished by their annual turnovers. A big business has big annual turnover and small or petty business has small annual turnover.

Threshold limit of turnover: 
      For various reasons, responsibility of collection of tax from recipients (purchasers) of goods and services and payment of amount of tax so collected to the Government, cannot be given to businessmen running petty businesses. Therefore, it becomes a requirement to identify those businessmen who can be kept outside the GST net. Such businessmen can be identified on the basis of their annual turnover. In the expression "threshold limit of turnover", word "threshold" has specific meaning. Meanings of word "threshold" are "a strip of wood or stone forming the bottom of a doorway and crossed in entering a house or room" or and synonyms of the word "threshold" are "doorstep, sill, doorsill, doorway, entrance, entry, way in, door, gate, gateway, portal, approach". Threshold limit of turnover is such amount of turnover that provisions of GST Law do not apply to persons whose aggregate turnover is less than such limit of turnover and provisions of GST Law apply only to those persons whose aggregate turnover is either equal to this limit of turnover or is greater than such limit of turnover. Threshold is the entry point for applicability of GST law. Suppose that if under the GST Law, annual turnover of 30 lakh rupees is fixed as threshold limit of turnover then GST Law will not apply to all those businessmen whose annual turnover will be below 30 lakh ruppes and GST Law will apply only to those businessmen whose annual turnover will be either 30 lakh rupees or more than 30 lakh rupees. Threshold limit of turnover may be understood as the minimum amount of turnover for applicability of GST Law.

Why threshold is needed:
      Under GST, businessmen are required to -
(1) maintain accounts of business transactions on day-to day basis;
(2) to issue tax invoices for each transaction;
(3) submit transaction-wise details of all supplies received by them;
(4) submit transaction-wise details of all supplies made by them;
(5) do cross matching of each transaction of supply received;
(6) compute amount of input tax and admissible amount of input tax credit;
(7) compute amount of output tax for all taxable supplies made;
(8) submit online details of input tax credit taken, amount of tax payable for each tax period;
(9) submit online return of GST for each tax period and pay tax periodically;
(10) have update knowledge of goods and services codes, rates of taxes applicable;
(11) submit annual return;
(12) face audit and inspections whenever required;
(13) obtain registration.
      For all this, a businessman is required to have accountant on regular basis. Petty businessmen will need at least an accountant on part time basis. They will also be required to seek services of some tax advisor or tax practitioner. For all this they will have to pay remuneration to the accountant and the tax advisor from their own profits. They are required to maintain accounting software. For big businesses, amount paid by them to accountants and legal advisor may be a small part of their income but for petty businessmen, having small earnings, such amount becomes significant amount.
       In many cases, petty business is run by a single person. Such persons, when they have to go for some outdoor work, have to keep their business places closed. Such persons will have to give extra time and days required for submission of details and returns of business. This will bring adverse effect on their business. This will result in loss of business and loss in their earnings. Even if quarterly returns are required, a businessman will lose business of approximately 15-20 days in a year which will be spent by him in submission of periodical returns and annual return through a chartered accountant or a tax return preparer.
       In absence of help of any tax advisor, it will be difficult for pretty businessmen to have track of changes made by the Government through notifications from time to time. This all will cast financial burden on big businesses as well as on small businesses. Such burden will be felt by big businesses as small burden but the same burden becomes huge burden for small businesses.

Legal aspect 
      For the purpose of implementation of goods and services tax, the Constitution of India was amended by the Constitution (One Hundred and First Amendment) Act, 2016. The assent to the said Act was given by the President on September 08, 2016. Article 279A of the Constitution of India provides for constitution of Goods and Services Council for giving its recommendations to the Union and States on GST related matters including draft of Model GST Law. Clause (4)(d) of Article 279A provides that the GST Council shall make recommendation to the Union and the States on - "threshold limit of turnover below which goods and services may be exempted from goods and services tax."

      To keep the petty businesses outside the GST net, issue of threshold limit of turnover was discussed by the Goods and Services Tax Council in its very first meeting held on September 22-23, 2017. On behalf og Government of India, the Revenue Secretary has suggested that fixing of threshold limit of turnover at 25 lakh rupees will be appropriate. The Secretary to the Council had explained that by raising the exemption limit to Rs.25 lakhs, 60% of tax-payers would be out of the tax net but the loss of revenue would only be 2%. This limit was suggested for all States except special category States. Honorable Revenue/ Taxation / Finance Ministers from the Union Government, States of Haryana, Chattisgarh, Gujarat, Jharkhand, Madhya Pradesh, Maharashtra, Odisha, Rajasthan, West Bengal, Delhi, Kerala, and Jammu and Kashmir have supported the move. Honorable Ministers from U.P., Puducherry, Punjab, Telangana, Goa and Bihar have suggested threshold limit of 10 lakh rupees. Ministers from other States either were not present or did not participate in the discussion. Out of 32 members of the Council, 27 members have been present in the meeting. Out of the present 27 members, including minister of the Central Government, 19 members have participated in the discussion. Out of 19 members, the Union Minister and 12 ministers from 12 States were in favour of threshold limit of 25 lakh rupees whereas 6 States were in favour of threshold limit of 10 lakh rupees.
      Paragraph 13 1nd 14 of the minutes of the meeting, duly signed by the Honorable Chairman, run as follows:
"13. Given the difference in opinions, the issue was deferred for reconsideration to the next day. In the meeting of 23rd September 2016, after further discussion, it was agreed that the threshold exemption shall be Rs. 20 lakhs. The Chairperson also observed that taking note of the concerns expressed by the Hon 'ble Chief Minister of Puducherry, this decision would be reviewed after 5 years (during which compensation for any loss of revenue is guaranteed) and a decision regarding any modification to the exemption threshold would be taken thereafter.
14. As regards the Special Category States enumerated in Article 279A of the Constitution, it was decided that the threshold exemption shall be Rs. 10 lakhs."
      Honorable Minister from Delhi was of the view that the exemption limit of Rs. 10 lakhs was too low and that they had a good experience after increasing the threshold limit to Rs. 20 lakhs. The Hon'ble Minister from Kerala had observed that the potential revenue loss by increasing the threshold was low but it would keep a large number of traders out of the tax net, which would help administrative efficiency. The Hon'ble Minister from Jammu and Kashmir had supported the threshold of Rs. 25 lakhs by stating that this would have helped in moving away from the control era. However, Honorable Ministers from Puducherry and Uttar Pradesh had expressed their concerns about the large number of tax payers who would have gone outside the tax net and revenue loss that would have been caused.

Threshold Limit is not applicable to all petty businesses
      Clause (4)(d) of Article 279A of the Constitution is about the threshold limit of turnover below which goods and services are to remain exempt from goods and services tax and the GST Council has also decided threshold for keeping persons outside the tax net but while preparing the drafts of GST Laws, the GST Council has not made this threshold limit available to a large number of persons falling in different categories. Threshold is not applicable to persons falling in following categories:
(i) persons making any inter-State taxable supply;
(ii) casual taxable persons making taxable supply;
(iii) persons who are required to pay tax under reverse charge;
(iv) person who are required to pay tax under sub-section (5) of section 9;
(v) non-resident taxable persons making taxable supply;
(vi) persons who are required to deduct tax under section 51, whether or not separately registered under this Act;
(vii) persons who make taxable supply of goods or services or both on behalf of other taxable persons whether as an agent or otherwise;
(viii) Input Service Distributor, whether or not separately registered under this Act;
(ix) persons who supply goods or services or both, other than supplies specified under sub-section (5) of section 9, through such electronic commerce operator who is required to collect tax at source under section 52;
(x) every electronic commerce operator;
(xi) every person supplying online information and database access or retrieval services from a place outside India to a person in India, other than a registered person; and
(xii) such other person or class of persons as may be notified by the Government on the recommendations of the Council.
      I am of the view that exception should not have been made. problems of petty businessmen are the same. Also there is no barrier in the Constitution in providing exemption at national level. The Central Government has, by issuing notifications, already provided relief to businesses who make taxable inter-State supplies of services and handicraft goods if their annual turnover is twenty lakh rupees or less. Persons should not have been descriminated on the basis of making supply of goods through electronic commerce operators. Prior to implementation of GST, a large number of educated otherwise unemployed youths have been making sales of petty items through electoronic commerce portals. They used to collect sale price through Online Payment Gateway Service Providers(OPGSP) who used to transfer money in the Bank Account of the seller. Such persons cannot hide their turnover. I am of the view that socio-economic conditions and complexities should have been considered while allowing or disallowing threshold limit of turnover. One can think of casual taxable persons. What type of casual taxable persons are prevailing in our country.

What could have been the reasonable threshold limit of turnover: 
      Looking into the thresholds fixed in neighboring countries and other countries, minimum threshold limit of turnover may be kept annual turnover of thirty lakh rupees or more. Even small countries like Nepal and Sri Lanka have thresholds of 50, 00,000 NPR (31, 15,000 INR) and 1, 20, 00,000 LKR (50, 24,000 INR). Bangladesh, for payment of turnover tax, has enlistment limit of turnover of 36,00,000 BDT (27,85,000 INR) and threshold for registration 1,50,00,000 BDT (1,16,00,000 INR).
       It is noteworthy that the Government does not collect Income Tax from persons whose annual income is upto 2,50,000 rupees. In cases of persons who run small businesses and who cannot maintain proper accounts, the Government accepts their income tax returns where they show net income from business of an amount which is 8 percent of their annual turnover or higher than 8 percent of their such turnover. On this basis we can infer that the Government does not levy income tax on small businesses if their annual turnover is 31, 25,000 rupees or less.
      Some other countries have thresholds for GST or VAT as under:

Serial No.Name of CountryThreshold Limit in Country CurrencyThreshold Limit in Indian Currency
1.BangladeshTT Enlistment    36,00,000    BDT
Registration 1,50,00,000    BDT
TT Enlistment    27,85,000 INR
Registration 1,16,00,000 INR
2.Sri Lanka1,20,00,000    LKR50,24,000 INR
3.PakistanManufacturers 1,00,00,000    PKR
Others     50,00,000    PKR
Manufacturers 60,88,000 INR
Others 30,44,000 INR
4.India20,00,000    INR20,00,000 INR
5.Nepal50,00,000    NPR31,15,000 INR
6.Malaysia5,00,000    MYR79,19,000 INR
7.Thailand18,00,000    THB35,56,000 INR
8.Japan1,00,00,000    JPY57,38,000 INR
9.Australiap75,000    AUD 36,61,000 INR
10.South Africa10,00,000    ZAR 47,22,000 INR
11.United Kingdom85,000 Pound71,00,000 INR
12.FranceGoods 82,000 EURO
Services 33,200 EURO
Goods 62,25,000 INR
Services 25,20,000 INR 
13.Ireland75,000 EURO56,94,000 INR

      Above quoted turnover figures have been obtained from various websites. Every care has been taken to ensure the accuracy. But before using these figures readers are advised to confirm the figures.
      In view of the above I think that the Government should reconsider the matter and should provide "threshold limit of turnover" as given in the Constitution. It should be available to all petty businesses irrespective of nature and mode of transactions. The Government should also consider about enhancing the limit of threshold.