After differences cropped up between Centre and states regarding the administrative
control of service tax assessees in the second meeting of GST council on
Friday, a technical committee of officers will now hold a series of meetings,
beginning with one later this week in Ahmedabad to resolve contentious issues.
The team will then brief their respective state finance ministers, who are
scheduled to gather in the national capital for the third GST Council meeting
from October 18-21.
In
its first meeting on September 23, the GST Council, which is headed by finance
minister Arun Jaitley, had decided to allow states to have administrative
control over Value Added Tax (VAT) assessees with annual turnover of less than
Rs1.5 crore and for turnover of over Rs 1.5 core, a system of cross empowerment
between states and Centre was agreed by the Council.
For
around 11 lakh service tax assessees, a status quo was decided in the first
meeting. The finance minister had conveyed that state government officials will
be trained in due course to handle the service tax cases, but till then Centre
will have exclusive jurisdictional control. It was also decided that new
assessees which would be added to the list would be divided between the Centre
and states.
The
decision was later opposed by some states in the second meeting last week Some
states in the meeting proposed to have a cross empowerment model for top
service tax assessees and exclusive control for Centre for smaller assessees. The
top service tax assesees constitute over 30,000 out of total 11 lath service tax
assessees at present. Also, states have asked for more clarity regarding control
of service tax assessees in sectors such as construction where both goods and
services are involved, a senior government official said. Though the Council
could have conducted voting on the issue, it was decided to refrain from going
ahead with a vote and instead build a consensus among the states, the official
added.
Due
to this sticking point of service tax assessment between the Centre and the
states, the minutes of meeting of the first GST Council meeting were not
approved in the second meeting held on Friday.
“With
regard to one item recorded in the minutes with regard to the service tax assessment
in the new dispensation, there was a long discussion on the interpretation on
the decision taken in the last meeting and that discussion consumed a lot of
time to-day. That discussion was inconclusive and therefore it will continue in
the next meeting on 18th (October)," finance minister Arun Jaitley told
reporters after the second meeting on September 30.
The
GST Council is trying to mow swiftly to decide on issues of draft IGST, CGST
and SGST laws and rules, GST rate structure and exemption lists by November 22
to meet its intended deadline of April 1,2017 for the indirect tax regime. With
two meetings, the Council has decided on threshold for GST levy, area-based
exemptions and draft rules dealing with registration, rules for payments,
return, refund and invoices. The rules will be notified once the Act is passed
and accordingly simultaneous changes are being made in model GST law. The GST
Council has decided to fix the exemption limit for the indirect tax at Rs 10
lakh for northeastern states and hill states and Rs 20 lath for other states
along with decision to subsume all cesses into GST.
The
next meeting of the council on October 18-20 will again take up discussions on
service tax assessment and the formula for calculating compensation for states
in case of revenue shortfall as a result of implementation of GST regime. The
crucial issue of GST rate will also come up for discussion in the three-day
meeting apart from selection of a state finance minister as the vice-chairman
of the council.
- Courtesy from sources
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