NO MORE LTU UNDER GST REGIME

All eyes are fixed on today’s GST Council meeting. In the last meeting two states have raised the issue over Centralized Administrative control over the Service tax. All the issues have to be resolved in the ongoing three days GST Council meeting so that it can be placed before the Winter Session of Parliament.

All states are busy in projection of loss and compensation and safeguarding their interests. Definitely the current meeting of GST Council will be a mile stone in the History of Tax Regime if all the hurdles are cleared and issues resolved for rolling out GST as per schedule from next Fiscal year.

CESA Mumbai hopes that due to our concerted efforts and goodwill we will be able to control the situation and the base.

There are 300+ Assessees registered with 5 Large Tax Payer Unit all over the country. Delhi, Kolkata Administration is of the opinion that LTU should not be in their Administrative Control and on 14.10.2016 Chennai also expressed that LTU should not be there. However, Mumbai and Bangalore have favoured for LTU. We have requested that the Concept of LTU is not fitting in the LTU and hence it should be abolished for proper administrative control over the units and the trade will also not have any difficulty now.

The members of the steering Committee will meet shortly after Diwali, in the first week of November and will deliberate on structural and HR related issues.

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LARGE TAXPAYER UNITS TO BE SHUT DOWN UNDER GST REGIME 

After the Planning Commission, yet another UPA government relic is set to fall. Large Taxpayers Units (LTUs) scheme, a dream project of the UPA government, is set to be abolished with the introduction of Goods and Service Tax (GST).

CBEC documents on structural changes under GST, accessed by DNA Money, show that the single winker tax facilitator for large taxpayers, would be abolished a decade after it was form3e in 2006.

Some experts believe that LTUs failed to fulfill the expectation of large taxpayers. T.R. Rustagi, former joint secretary of ministry of finance said, "LTU was not a great success.  It would die its natural death with introduction of GST.

Some tax experts and former bureaucrats, however, supported the relevance of LTUs in GST regime. Sumit Dutt Majumdar, former chairman of Central Board of Excise and Customs (CBEC), said, “We must not abandon LTUs, Rather, we should extend the concept to STUs (Small Taxpayers Units) in the GST regime. And, as mentioned, it can have CGST and SGST authorities and income tax authorities as its constituents.

In the 2005-06 Budget speech, the then finance  Minister P Chidambaram said, “ As a measure of facilitation, I propose to follow international practice and establish LTUs. To begin with, these units will be set up in major cities. I would like to invite large taxpayers, whether of corporate tax or excise duties or service tax, to participate in the programme and avail of the single widow service.

However, LTUs could not give desired results on the ground. In January 2016, IT group Nascom raised administrative and operational difficulties in LTUs, suggesting their dismantling.

The American Chambers of Commerce in India too strongly reacted against credit transfer issue in LTUs.

PROPOSED ORGANISATION STRUCTURE UNDER GST

                                                                       In Nos

          GST Zones                                             24

          Large Taxpayers' Units                         0

          GST Commissionerates                    107

          GST Audit Commissionerates           53

          GST Commissioner (Appeal)             53     

          GST Divisions                                     535

  --  Curtesy sources