GST

Moving inch by inch towards GST

The 9th GST council meeting between the centre and the states on January 16 passed off with a broad consensus on several fronts. The roll out of GST would begin by July 1. The centre conceded in leaving 90 per cent dealers in under Rs 1.5 crore annual turnover category within the State government purview.

 Another contentious area of levying tax on economic activity within 12 nautical miles of territorial waters was given to states though such rights vest with the centre.  The initial roll out of GST by April 1 may not happen now and has been deferred to July 1, 2016. Nevertheless, the movement towards a new GST regime is happening inch-by-inch.

 In the next council meeting scheduled on February 18, the officials would sit together to categorize goods under the slabs of 6 per cent, 12 per cent, 18 per cent and 28 per cent. Finance ministers of different states have been making efforts to see that there would be no tax on agriculture products and minimum possible tax on goods used by the common man.

On the issue of differences between states over GST, the centre would intervene and resolve.

 Overall there has been a consensus among all the states barring West Bengal which insists a 100 per cent control over the traders with a turnover below Rs 1.5 crore.

The power to levy and collect Integrated-GST, a tax on inter-state movement of goods and services, would lie with centre but by special provisions, states will also be cross-empowered.  While there are issues such as dual control over assesses, the fact that with each council meeting some headway is being made augurs well for GST.

The coming days are exciting as several questions on sharing of administration, how is it going to be for large tax players, whether it would be on the basis of revenue or type of supply is to be seen.

The publication of GST laws would be keenly observed as all stake holders prepare for what can be termed as a new regime. Watch this space for more on GST.