Saturday, November 5, 2016

Glitches Remain in GST Roll Out

                   Jurisdiction issue can derail GST

For the second time in as many weeks, the Centre and states on Friday failed to reach a consensus on who will control which set of assessees under the Goods and Services Tax (GST), a disagreement that threatens to derail the April 1 target for rollout of the new indirect tax regime. After nailing a four-tier rate structure of 5, 12, 18 and 28 per cent, the all-powerful GST Council on the second day failed to reach a consensus over which category of assessees should be governed by the Centre and which by states. The November 9-10 meeting of the Council has been called off. It was to finalise the draft law and supporting legislations for subsuming an array of central and state levies, including excise duty, service tax and VAT.



The Finance Ministers of states will now meet informally on November 20 to evolve a political consensus on the sticky issue. The next meeting of the Arun Jaitley, has been scheduled for November 24-25. Jaitley, who had previously stated that he hoped for all modalities for the GST to be finalised by November 22, was still hopeful of getting the supporting legislations during the ensuing Winter Session of Parliament from November 16. "That's the effort. I am endeavoring to do that," he said when asked if the CGST and IGST legislations will come before Parliament in the upcoming session. "When in the month of August we passed the Constitution amendment, it appeared too challenging because the time was very short. As of today, I am more confident than I was in August. Let me say this because bulk of the spade work has been done. Most of the decisions have been taken. Only one key decision remains," he said. Differences on the issue of cross empowerment to avoid dual control arose with states demanding control over 11 lakh service tax assessees, and Centre proposing to do away with states having exclusive control over all dealers up to an annual revenue threshold of Rs 1.5 crore -- an issue which was settled in the first meeting of the GST Council. No decision could be arrived at the end of the third meeting of the Council on October 19.     
                                                                                                             From Sources:-

2 comments:

  1. One point which has gone unnoticed in counting the number of service tax assesses is that the figure of 11 lakh or 30 lakh is totally incorrect. In fact due to RCM instead on one assesse (i.e. a GTA or MPRA service provider) 5 or 10 or 20 Service recipient) have obtained registration and are counted as service tax assesse because they have been made liable to pay tax for that 1 single service provider. So if we have to know the correct number of service providers we have to rely on some other data or discontinue with RCM system making only the service provider liable for payment of service tax even for foreign service providers. Only thereafter correct position of service tax assesses will come out.

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