With an aim to widen the tax base under the new Goods and Services Tax (GST) regime, the government is now planning to further ease-out compliance norms for small businesses with annual turnover under Rs 20 lakh.

According to a report by The Times of India, the new compliance mechanism is being worked out by the Central Board of Excise and Customs (CBEC) with an aim to widen the tax base to plug loopholes and make GST more broad-based. The process it is still at conceptualisation stage and based on the plan, rules will be finalised by the GST Council.

“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 an official clarifying that the motive is to ensure that registered enterprises have a clear record of their business relations while engaging with the non-registered ones.

It was some 15 days back only when Prime Minister Narendra Modi had urged tax officers to bring-in small traders with turnover less than Rs 20 lakh in the new goods and services tax regime, regardless of the compliance requirement. The move seems to come as a result of the PM’s appeal.

The PM had said that in order to enable all traders to take maximum benefit of GST, we should work towards ensuring that all traders, including even relatively smaller traders with a turnover below Rs 20 lakh, should register with the GST system. He had asked tax officers to work-out a system in this regard for small players outside the indirect tax paying bracket, and hence sprung the CBEC ‘compliance mechanism-in-process’.