GST deadlock ends; FM Arun Jaitley says dual control issue resolved, 1 July roll out likely

Union Finance Minister, Arun Jaitley, on Monday said the differences between the centre and the state governments on the issue of dual control has been resolved, paving the way to the likely roll out of the indirect tax reform beginning 1 July of this year.

"Decision arrived at on cross empowerment and dual control issue of GST; entire taxation base to be shared between assessment machinery of Centre and states," said Jaitley at a presser in Delhi.

As per the understanding between the centre and states, 90 percent of the GST taxpayers with up to Rs 1.5 crore turnover will be assessed by states, while 10 percent will be assessed by the centre. As far as those above Rs 1.5 crore turn over is concerned, the assessment will be done on a 50:50 basis between centre and states.

Further, states will be empowered to tax any economic activity in territorial water up to 12 nautical miles,the FM said.

GST is the biggest indirect tax reform India has seen in decades and is expected to absolve several state level levies into one thus creating a uniform tax regime. This is expected to help the economy widen the taxbase over a period of time.

Earlier in the day, it appeared that there was no consensus emerging on the issue of dual control after Kerala finance minister, Thomas Isaac said the differences still persist.

"There is no agreement. The discussions are still going on. There is no agreement as to how the taxes will be administered", Kerala Finance Minister T M Thomas Isaac told reporters here. This gave a sense to the media that GST deadlock is continuing.
However, at the presser, Jaitley said all state finance ministers were now on the board on the issue of dual control except West Bengal FM.The next GST council meeting will be held on 18 February.

The Council, in its previous meeting, had agreed on most of the clauses of the draft IGST law, which along with central GST (CGST) and state GST (SGST) have to be passed by Parliament and state legislatures, respectively, before the new indirect tax regime can be rolled out. IGST deals in levy on inter-state supply (including stock transfers) of goods or services.

GST will subsume a host of indirect taxes levied by the Centre and states, including excise duty, VAT, service tax, entry, luxury and entertainment levies.

Parliament passed the landmark constitutional amendment in August last year and more than half of state legislatures ratified it by mid-September.

According to Jaitley, GST needs to be rolled out latest by September 16, 2017.

Under the Constitutional Amendment passed by Parliament for GST implementation, some of the existing levies will expire after September 16.

GST is expected to transform India into a single market, boost revenues through better compliance and simpler procedure.

SOURCE: FIRSTPOST

April 1, 2017 deadline for GST Rollout almost ruled out

The 2 day GST Coucil Meeting ended on 23rd December 2016.  The Centre and States covered significant distance towards rollout of Goods and Service Tax (GST), when they cleared bulk of the laws for the Central and State GST. The revised draft Bills, after a legal vetting will again be placed before the GST Council at its next meeting scheduled to be held on 3rd & 4th January 2017. After that the Bills will be taken up by Parliament and State assemblies.

However consensus still could not be reached on the issue of administrative control. The issue of administrative control and the related Integrated GST Law that deals with inter state Sales will be taken up in the next meeting of the GST Council. 

"I am trying my best (on deadline of 1 April). I don't want to hasten the process of discussion and don't want to delay the implementation," Jaitley said at a press briefing after the Council meet ended.
The Finance Minister however said: "There was no issue raised on dual control today as we were working on legislations."

The drafts of Central GST (cGST) and the compensation law have been mostly approved with the only portions relating to dual control being left out, he added.

Jaitley said that the two principle issues that still remain before the Council are Integrated GST (iGST) and cross empowerment.

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#GST Exemption Limit set at Rs.20 lakhs

The meeting of GST Council was held at New Delhi today. The major decisions taken at the meeting are as follows:

Threshold for Exemption
The threshold for GST has been fixed at Rs. 20 Lakhs. For Businesses in North Eastern States, the limit will be Rs. 10 Lakhs. GST will not be applicable on Businesses with annual turnover below the exemption limit.

Dual Control
On issue of Dual Control, consensus was reached in the meeting. All Businesses with annual Turnover below Rs. 1.50 Crore will be assessed by State Authorities. Businesses with Turnover above Rs. 1.50 Crore, will be assessed by either Central Govt or State Govt. For this purpose, a mechanism will be developed. All Service Tax assessees will be assessed by Central Government irrespective of the Turnover.

The next meeting of the GST Council will be held on 30th September to discuss draft Rules and Exemptions.

Rates and Slabs of GST will be decided in the meeting of the Council to be held on 17-19 October.

Centre, states agree on timetable for April 1 GST rollout

Moving towards rolling out GST from April 1, the Centre and states on Thursday agreed on a timetable for deciding on the tax rate and completion of legislative work but differences remained on the turnover limit for exemption from the new tax.

The first meeting of the newly-constituted GST Council saw states like Tamil Nadu and Uttar Pradesh demanding a larger say than one-state-one-vote principle that puts a smaller state on equal footing with a large manufacturing one. While their demand was overruled, consensus also eluded first day of the meeting over the issue of exemption to dealers from the Goods and Services Tax (GST). While some states demanded traders with turnover of Rs 10 lakh or less be exempted, a large number, including Delhi, were in favour of the limit being fixed at Rs 25 lakh in a year.
With tax collected from traders being just 2 per cent of the total tax collection, majority view was in favour of a higher exemption limit.

The GST Council, which is headed by Union Finance Minister Arun Jaitley and includes representatives of all the 29 states and 2 union territories, will continue tomorrow. At the meeting draft rules regarding GST were circulated and threshold for exemption and compensation norm discussed.
Clarity on base year for compensating states for loss of revenue following implementation of GST, which is to subsume an array of Central and state levies, including excise, service tax and VAT, will be deliberated further tomorrow.

Briefing reporters, Jaitley said the timetable has been set keeping the April 1, 2017, deadline in mind.
"The target also involves the passage of CGST and IGST law at the central Parliament and then by the state legislatures the state GST law in the winter session itself. "Today, starting from September 22, we roughly have two months time till November 22 to resolve all outstanding issues and therefore a draft timetable was given which also have been adopted," Jaitley said.

The GST Council meeting, which will continue tomorrow, will discuss on the compensation formula and with regard to the provision for cross empowerment, he said.
"With regard to composition we have finalised our proposal which has been unanimously accepted by the members. With regard to threshold for exemptions, there are two sets of suggestions which have come. We have converged to those two different views and both on officers and ministers track we will continue the meeting tomorrow and thereafter so that we are able to converge to one particular figure as far as the exemptions are concerned," Jaitley said.

Also, doubts were cast over West Bengal Finance Minister Amit Mitra being appointed vice-chairman of the GST Council in absence of the state approving the Constitution Amendment Bill.
To get that chair and for any member to be eligible to vote on issues before the Council, their respective states have to clear the Constitution Amendment Bill on GST.
A consensus on compounding or composition scheme was arrived at the GST Council meeting today which decided that traders with gross turnover cut-off of Rs 50 lakh will pay 1-2 per cent tax, Revenue Secretary Hasmukh Adhia said.

The composition scheme provides for a easier method of calculating tax liability and it allows option for GST registration for dealers with turnover below the compounding cut-off.
The scheme has been introduced in the Goods and Services Tax (GST) regime to reduce the administration cost associated with collection of tax from small traders. Accordingly, businesses below a turnover of Rs 50 lakh can pay taxes at a defined floor rate of 1-2 per cent, which will be much lower than the GST rate.
The Council in its subsequent meetings would take up the issue of GST rate. — PTI

SOURCE: THE TRIBUNE

#GST Council to discuss 3 critical issues on Thursday

The newly formed Goods and Services Tax (GST) council will meet for the very first time tomorrow. With the Union Finance Minister as the Chairperson, this panel of State Finance Ministers and some top officials from the Finance Ministry will have the task of finalizing the entire road map for the GST rollout.
The panel will be discussing three critical issues at the first meeting - dual control; the GST threshold and the compensation mechanism, reports CNBC-TV18’s Sapna Das.

On the issue of dual control, it is understood that the states are opposed to any concept of dual control up to an annual revenue number of Rs 1.5 crore. On the GST threshold front, it is given to understand the Centre has been pushing for an Rs 25 lakh annual threshold for GST from the time it should kick in. However, some states have a much lower limit of Rs 10 lakh. So, there is possibility a consensus agreement of threshold of Rs 25 lakh. With regards to the compensation mechanism, the formula and the base year will have to be decided; the year from which year the calculation will have to be made.

It is likely that there will be separate law on compensation under GST. Some other interesting issues like GST rate, as well as discussions on the GST exemptions are not on the Council’s agenda but the end call on whether to discuss the issues depends on the Chairperson. With regards to voting, the attempt would be to strike a consensus and at least three-fourth of the members will have to be on board on any decision to be taken.

SOURCE: MONEYCONTROL

#GST slabs necessary but only for a transition period, says Arjun Ram Meghwal

The Goods and Services Tax (GST) will have few tax rate slabs beside a standard rate but only for a transition period before India gradually moves to a pure single tax rate regime, Minister of State for Finance Arjun Ram Meghwal said on Sunday.

Slabs are necessary to protect manufacturing sector in the very low tax brackets, Meghwal added. “There will be slabs in the tax rate beside a standard rate. Some sectors like Bikaneri Papad where tax is just one per cent… these industries will die if a single standard rate is applied,” the minister said here highlighting benefits of GST at an event here.

“At the time when we are pushing for ‘Make In India’, we cannot afford to impact any manufacturing sector. Manufacturers should ‘not’ fear that indirect taxes will go up in a major way,” he asserted.
At an interactive session organised by the Calcutta Chamber of Commerce, Meghwal added that there would be several changes in the GST before it is passed and also said that the West Bengal government should pass it in the state Assembly.

“When Bengal chief minister Mamata Banerjee had come to Delhi she had said that they were in support of the GST. Their people had accordingly supported it in the Lok Sabha and the Rajya Sabha but in the recently concluded two-day session of the Assembly here, I was told that the GST discussion was dropped from the agenda owing to paucity of time. The consumer and manufacturers’ groups should put pressure on the government here to pass it in the Assembly,” Meghwal said.

Responding to a suggestion by an industry representative that the threshold limit of Rs 10 lakh as turnover should be raised Meghwal said that the threshold limit would definitely be changed. “We had kept it as Rs 10 lakh in public domain for public reaction. We want to increase it but the states are not agreeing because they think it will bring down their income. There will be a meeting of the states on September 22 or 23, where this thing will be discussed. I think the profit of a company, assuming it to be 10 per cent of the turnover, should be equal to the limit of tax exemption which a government employee gets,” he added. With PTI

SOURCE: THE INDIAN EXPRESS

'Govt mulls raising #GST exemption limit to 25 Lakh'

AHMEDABAD: In what can result in major relief to small traders and dealers, the Union government is thinking of exempting dealers with turnover up to Rs 25 lakh from Goods and Services Tax (GST). Earlier, traders with turnover of Rs 10 lakh or less had been marked for exemption.

"According to our recent discussion with the states, if we calculate the turnovers of dealers across the country, 60% of them fall under Rs 10 lakh and Rs 25 lakh bracket. If the limit is raised to Rs 25 lakh, 60% of dealers will go out of the tax net," said Hasmukh Adhia, revenue secretary, government of India.

"Now, it is a big number. However, the tax collected from these traders is just 2% (of total tax collections). Hence, we thought of increasing the limit for exemption application, and most states have agreed. But, the final decision in this regard will be taken by the GST Council," Adhia added.

Speaking at an awareness programme on GST in Ahmedabad on Saturday, Adhia also promised the business community that GST rate structure will be built keeping in mind that overall taxes on goods and commodities are brought down to benefit consumers. This will be the case for most commodities. "In case of a few commodities, we may have to increase the tax a bit," he said. The event was organised by Gujarat Chamber of Commerce and Industry (GCCI).

Making it clear that a single GST rate across the country is not feasible at this moment, he said, "There will be multiple GST rates to start with and these rates will be fixed by the council." The revenue secretary also accepted the suggestion made by GCCI that 'securities' should be excluded from the definition of goods, and that electricity, too, should be excluded from the ambit of GST.

SOURCE: THE TIMES OF INDIA