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5
January 2017
Admitting
that the Goods and Services Tax (GST) Council was racing against time on the
government's implementation target of April 1, Finance Minister Arun Jaitley on
Wednesday said it is hoping to resolve the vexed issue of dual control over
assessees in its next meeting on January 16, even as states indicated a
September timeline for GST. The Total
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"We
know the difficulties, we are moving against time. Dual control is a complex
issue. We started a discussion that was inconclusive. We have decided to meet
on January 16 to untie the knots in this issue," Jaitley told reporters
here after the two-day GST Council meet.
"We
will be meeting to conclude the discussion on the gaps in draft laws. The gaps
are on two issues. The first pertains to the definition of the word territory
(in Integrated GST) and the second is on dual control and cross
empowerment," he said. The Total
Investment & Insurance Solutions
Even
after eight meetings of the GST Council, the deadlock continues between the
Centre and the states on the vexed issue of "cross empowerment", or
dual control of assessees and who will exercise control over them. The Total Investment & Insurance
Solutions
The
states want exclusive control on businesses with turnover below Rs 1.5 crore
(the current threshold for central excise), including the service taxpayers.
The
impact of demonetisation on states' tax revenues was also brought up at the
meeting and Jaitley said that the states presented their estimates of December
revenue figures based on collections made in November, the month of the
demonetisation announcement.
"A
number of state finance ministers gave details of how revenue has actually
increased in their states during this period. We've asked for detailed data in
this regard," he said.
To a
query on the impact of the November 8 demonetisation of high-value currency,
Jaitley said that excepting the next quarter of the fiscal, the
demonetisation-led process of "integrating the informal economy into the
formal one" will actually result in higher revenues.
"We
will end this year with higher revenues...in both direct and indirect taxes
we'll exceed the budget estimates," he added. The Total Investment & Insurance Solutions
Instead,
declining to set a dateline for implementing the Goods and Services Tax (GST),
West Bengal Finance Minister Amit Mitra said demonetisation has hugely impacted
states' tax revenues, while Indian industry itself required more time to
prepare for the new indirect tax regime.
"States
are making presentation to the Union Finance Minister, saying we're not geting
any money from the Centre," Mitra told reporters. The Total Investment & Insurance Solutions
"We
could not pass the iGST law. There was no discussion on the dual control
issue... the states' right to jurisdiction over small businesses with less than
Rs 1.5 crore turnover. All that has still to be discussed.
"We
cannot have a GST that is non-sustainable, a GST that does not work," he
added.
Pointing
out that Indian industry has said it is not fully ready for the roll-out of the
GST regime, Mitra told reporters that the question on a GST timeline was better
addressed to Jaitley.
"A
number of steps have to be taken for business to prepare, of which there is no
sight. Upgrading of companies' ERP (enterprise resource planning) is yet to
take place.
"Besides,
no fitment has happened," he said, referring to the alignment required to
the GST tax rate structure that has been decided. The Total Investment & Insurance Solutions
The
possibility of roll out of GST has moved further to September as a new issue
has cropped up - the states' demand for an increased share in the new indirect
tax collections, Kerala Finance Minister Thomas Issac said. The Total Investment & Insurance
Solutions
"I
am not very optimistic about GST rolling in June or July. It is better to move
to GST after all the preparations are done. To my understanding it will be
implemented September onwards," he told reporters here. The Total Investment & Insurance
Solutions
Raising
new issues between the Centre and the states, Issac said that the Council
members discussed the four tax slabs under the GST and the states felt that the
states and Centre share in the taxes should be 60:40 and not 50:50. The Total Investment & Insurance
Solutions
"Over
the years, states' rights have been curtailed. This presents a historic
opportunity to correct the states' share to 60 per cent and Centre's share
would be at 40 per cent. The states today (on Wednesday) supported this
understanding," he added. The
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Four
tax rates of 5 per cent, 12 per cent, 18 per cent and 28 per cent have been
decided under the GST regime. The
Total Investment & Insurance Solutions
