Finance Minister Arun Jaitley has addressed the media after 9th GST Council meeting and said that GST deadline is deferred to 1st July 2017 and Center and States has come to Consensus on all pending issues. Some of the highlights of his media briefing is as follows:-
1. The entire taxation base will be shared between the assessment and machinery of the Centre and the states.
2. Those above turnover 1.5 crores would be assessed in the ratio of 50:50 between Centre and state.
3. All assesses with GST turnover of Rs. 1.5 crore or less, 90 per cent of them will be assessed by States & 10 per cent by administrative machinery of Centre. The agreement hammered out was based on a proposal by Tamil Nadu.
4. Each assessee would be assessed only by one authority only.
5. Computer programming will be done in such a way that there is no discretion (in selection of assessees)
6. power to levy and collect the I-GST lies with the central government but states will also be cross-empowered in the same ratio as above through a special provision in law. Any IGST disputes among states will be resolved by the Centre.
7. Centre also ceded ground on taxation rights over the sea. Territorial waters extending to 12 nautical miles fall under control of the union government but as per convention, states will be empowered to collect tax on any economic activity in this zone.
8. GST deadline has been deferred to July 1. The government earlier set April 1 as the GST roll-out deadline.
Krishan Arora, Partner, Grant Thornton India LLP on the outcome of GST council meeting (post FM’s press briefing) said that “After the continued deadlock in the last four meetings over dual control issue, it appears that the majority of council members are now in agreement on this issue. While it needs to be seen as to what basis would be adopted to exercise the jurisdiction in the proposed split by states and centre, it is certain that 1st April 2017 deadline would be missed. With FM’s indication of a revised implementation date, industry players would now need to revisit their GST transition strategy with a backup plan for few months rolling over beyond 1 April 2017 resulting in dual compliance. It could also pose certain additional challenges for many organized players with regard to their year-end activities including areas such as inventory planning, budgeting, working capital, etc. which were aligned to a timely GST rollout.”