Businesses that have turnovers of up to Rs 20 lakh will be exempt from the Goods and Services Tax (GST) regime, Finance Minister Arun Jaitley announced on Friday. However, the exemption limit for those in the northeastern states will be Rs 10 lakh, reported ANI.

A meeting of the GST Council was held on Thursday to decide on the threshold because states differed on the issue. The government had suggested Rs 25 lakh as the upper limit, but several states wanted a smaller number.

Other issues discussed on Friday included cross-empowerment, or control over small businesses, and compensation to the states. After the meeting, Jaitley, who heads the council, said, "The general consensus was that the payment of compensation should be regular. The base year for calculating for compensation will be 2015-2016." The Council also decided that those businesses that have an annual turnover of less than Rs 1.5 crore will be assessed by state authorities.

On the first day of the meeting, the council decided on the rules and timetable of GST Council meetings, and the compounding procedure, reported The Hindu Business Line. Jaitley said the council will meet again on October 17, 18 and 19 to finalise the tax rates and the slabs.