Lok Sabha Question No. 2362 (UNSTARRED), answered on 2019-07-08
Subject: Tax Share of States
Ministry: FINANCE
Asked by: Kaushalendra Kumar

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE

## LOK SABHA UNSTARRED QUESTION NO- 2362

TO BE ANSWERED ON Monday, July 8, 2019/Ashadha 17, 1941 (Saka)

## Tax Share of States

2362. SHRI KAUSHALENDRA KUMAR:

Will the Minister of FINANCE be pleased to state:

- (a)  whether  the  tax  share  of  the  States  has  been  increased  because  of  the  huge recovery of the Goods and Services Tax (GST) per month;
- (b) if so, whether the increased tax is likely to be utilized for the development of these States and if so, the details thereof;
- (c)  whether the Government proposes to reduce GST rates in view of the huge GST recovery;
- (d) if so, the details thereof; and
- (e) the steps being taken to simplify the GST?

## ANSWER MINISTER OF STATE IN MINISTRY OF FINANCE (SH. ANURAG SINGH THAKUR)

- (a) & (b): Details of tax devolution released/ allocated to the States for the financial year 2017-18 to 2019-20 is furnished below: -

(Rs. In Crores)

|   Actual 2017-18 |   Actual 2018-19 |   BE 2019-20 (Interim) |
|------------------|------------------|------------------------|
|           673005 |           761454 |                 844605 |

- (c) & (d): Decision on GST rates are taken on the basis of the recommendations of the GST Council. Presently, there is no proposal under consideration by the Government based on the recommendation of the GST Council to modify/revise or reduce GST rates.
- (e) Based on the representations received from various stakeholders and recommendations  of  the  GST  Council,  the  Government  has  taken  various  steps towards simplification of GST. Some of the steps taken in this regard are as follows:
1. Vide notification No. 10/2019 - Central Tax dated 07.03.2019, the threshold limits of aggregate turnover for exemption from registration and payment of GST for
- the persons exclusively engaged in the supply of goods has been fixed at Rs. 40 lakhs. The said limit shall be Rs. 20 lakhs in the States of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura and Uttarakhand with effect from 01.04.2019.
2. Service providers making inter-State supplies, including those supplying through e-commerce operators, whose aggregate annual turnover does not exceed Rs. 20 Lakh, have been exempted from the requirement of registration under GST.
3. The GST Council, in its 32 nd  meeting held on 10.01.2019, recommended to increase the  limit  of  annual  turnover  in  the  preceding  Financial  Year  for  availing Composition Scheme for supplier of Goods to Rs 1.5 crores. The said limit would be  Rs.  75  lakh  in  special  category  States  of  Arunachal  Pradesh,  Manipur, Meghalaya,  Mizoram,  Nagaland,  Sikkim,  Tripura  and  Uttarakhand.  Also,  the compliance  under  Composition  Scheme  has  been  simplified  as composition taxpayers  have  to  file  only  one  annual  return  with  quarterly  payment  of taxes (along  with  a  simple  declaration).  This  has  been  implemented  w.e.f. 01.04.2019 vide issuance of notification No. 14/2019-Central Tax dated 07.03.2019.
4. A Composition Scheme has been made available for suppliers of services (to those who are not eligible for the presently available Composition Scheme) with a tax rate of 6% (3% CGST +3% SGST) having an annual turnover in the preceding Financial Year up to Rs. 50 lakhs. They would be required to file one annual return with quarterly payment of taxes. This has been implemented w.e.f. 01.04.2019 vide issuance of notification No. 2/2019-Central Tax (Rate) dated 07.03.2019.
5. New return model: The GST Council, in its 31 st  meeting held on 22.12.2018 at New Delhi,  decided  that  a  new  GST  return  system  will  be  introduced  to  facilitate taxpayers.  All  taxpayers,  excluding  small  taxpayers  having  aggregate  turnover below Rs. 5 crores, and a few exceptions like Input Service Distributor (ISD) etc. shall file one monthly return. The details of outward supplies shall be reported in FORM GST ANX-1 and FORM GST ANX-2 shall  capture  the  details  of  inward supplies for availing input tax credit. Return filing dates shall be staggered based on the turnover of the taxpayer. Invoices can be uploaded continuously by the seller and can be continuously viewed and locked by the buyer for availing input tax credit. NIL return filers (no purchase and no sale) shall be given facility to file return by sending SMS. Small taxpayers (annual turnover less than Rs 5 crores) shall have the facility to file quarterly return with monthly payment of taxes on self-declaration basis. The GST Council, in its 35 th  meeting held on 21 st  June, 2019, had approved a roadmap for the phased rollout of the new return system starting from July, 2019.
6. Aadhaar-enabled GST Registration: In order to ease the current process of GST registration and reduce the paperwork involved, GST Council, in its 35 th  meeting held  on  21 st   June,  2019,  has  given  in  principle  approval  to  a  new  system  for verification  of  taxpayers  registering  themselves  under  GST  by  linking  their Aadhaar number with GSTIN (GST Identification Number).

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