SME Times News Bureau | 17 Jan, 2017
Declaring that the Centre and
the states have agreed on a formula to resolve the issue of dual
control under the proposed Goods and Services Tax regime, Finance
Minister Arun Jaitley on Monday said the coming July 1 appeared to be
a "more realistic" option for implementing GST instead of
the earlier targeted rollout date of April 1, 2017.
Briefing
reporters after the ninth meeting here of the GST Council chaired by
him, Jaitley said the time required from now to finalise the GST
draft legislation and rules and its passage by state legislatures
meant postponing the earlier implementation target date.
"The
broad consensus is that the first of July appears to be a more
realistic date," Jaitley said with reference to the new GST
rollout target.
"Besides, industry and trade also have to
be given adequate notice to prepare for GST," he said.
The
Finance Minister said the differences between the Centre and the
state governments on the issue of dual control has been
resolved.
"Decision has been arrived at on the
cross-empowerment and dual control issue of GST. The entire taxation
base is to be shared between assessment machinery of Centre and
states," he said.
"As per the understanding between
the Centre and states, 90 per cent of the GST taxpayers with up to Rs
1.5 crore turnover will be assessed by states, while 10 per cent will
be assessed by the central government.
"As far as those
above Rs 1.5 crore turnover is concerned, the assessment will be done
on a 50:50 basis between the Centre and states," he added.
The
states have been demanding exclusive control on businesses with
turnover below Rs 1.5 crore (the current threshold for central
excise), including the service taxpayers.
Earlier, Kerala
Finance Minister and GST Council member Thomas Isaac emerged from the
meeting to say that Tamil Nadu had proposed the formula that was
finally approved.
"Tamil Nadu has presented a compromise
formula whereby states will have control over small assesees with
turnover less than Rs 1.5 crore, while a small percentage of
assesees... 10 per cent, could be given to the Centre for audit
purposes," Isaac said.
On the other contentious issue of
territory jurisdiction, Jaitley said states will be empowered to tax
any economic activity in territorial waters up to 12 nautical
miles.
"As far as the area of 12 nautical miles is
concerned, this territory is of the Union. States will be empowered
to collect tax on economic activity in this territory," he
said.
The Centre's earlier proposal to tax transactions that
take place within 12 nautical miles from state borders has been
opposed by several states, which stand to lose substantial revenue in
this way.
Jaitley also announced that the next meeting of the
Council to finalise the draft legislations will be held here on
February 18.
Emerging from the meeting earlier, Isaac told
reporters that as no consensus had emerged on the issue of dual
control over assessees under the proposed GST, there was very little
possibility of the new indirect tax regime being implemented by the
targeted deadline of April 1.
He also said that no dates had
been decided for the next meeting of the Council.
Eight
earlier meetings of the Council have failed to resolve the deadlock
between the Centre and the states on the issue of "cross
empowerment", or dual control of assessees, and who will
exercise control over them.