“July 1 appears to be more realistic” as a target date for GST’s rollout, said Finance Minister Arun Jaitley. “Since GST is a transactional tax, it can be introduced at any time,” he said after the ninth meeting round of the GST Council.
The Centre and States agreed to share the entire taxation base for assessment with a horizontal division. Under the formula, which will apply for both goods producers and service providers, States will have the power to assess 90 per cent of all assessees with a GST turnover of ₹1.5 crore or less. The remainder will be with the Centre.
Assessees with a GST turnover of over ₹ 1.5 crore will be assessed in a 50:50 ratio by the Centre and States.
“Intelligence-based enforcement powers will vest with assessing officers of both the Centre and States for all assesees,” said Jaitley, who chairs the Council.
The division of taxpayers between the Centre and States will be done through a computerised programme. “Each assessee will be assessed only by one authority,” Jaitley stressed. All States except West Bengal accepted the proposal. West Bengal was keen that all assessees with a turnover of up to ₹1.5 crore remain with States.
Only the Centre will levy and collect Integrated GST (IGST), except for special provisions, wherein the States will also be cross-empowered.
In the contentious issue of place of supply in IGST for States, the assessment will be done by the Centre.
The GST Council also reached an agreement on taxing of high-sea trade up to 12 nautical miles into territorial waters. Though this belongs to the Centre, Jaitley said States can collect tax on any economic activity in the territory.
The GST Council will meet again on February 18. In the meantime, the technical group of officers will finalise the draft legislations for the Central, State and Integrated GST, and compensation.
Jaitley said once the drafts are cleared, they would go to the respective legislative bodies for approval. Officers will then work on the fitment of commodities into various tax slabs. “This will take us into the month of March,” he said, adding that trade and industry will also require adequate notice, while the GST Network would also have to be modified.
Experts said businesses now have adequate time to prepare for GST.
“It’s now clear that the new date for GST implementation will be July 1, 2017, which gives some time for industry to prepare. What remains now are the rates for various goods and services,” said Harishanker Subramaniam, National Leader (Indirect Tax), EY India.
Credits The Hindu Business Line