Question 13 – Draft-Bills-Reports – Frequently Asked Questions (FAQ) GST – FAQ [OLD] on Goods and Services Tax (GST) – (December 2015) – Question 13 – Q 13: What is the concept of providing threshold exemption for GST? Ans: Threshold exemption is built into a tax regime to keep small traders out of tax net. This has three-fold objectives: a. It is difficult to administer small traders and cost of administering of such traders is very high in comparison to the tax paid by them. b. The compliance cost and compliance effort would be saved for such small traders. c. Small traders get relative advantage over large enterprises on account of lower tax incidence. The present thresholds prescribed in different State VAT Acts below which VAT is not
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