Dr. Sanjiv Agarwal, FCA, FCS

Sanjiv Agarwal PhotoGST Council’s 9th meeting was held recently on 16th January, 2017 for the ninth time, second time in 2017, for deciding upon the unresolved issues, mainly about the cross empowerment and territorial jurisdiction of states. This meeting was considered significant for timing of GST as the last attempt to reconcile and make the states agree, if the Union Government was still eyeing at 1st April, 2017 for GST introduction. However, the GSTC did decided the issues before it but also deferred GST schedule by a quarter to 1st July, 2017.

States wanted that they should control the entire assessee base including service tax assessees below the threshold limit of Rs 1.5 crore whereas Centre was of the view that the States lack expertise and knowledge in service tax. While this may be true in the present scenario, training can always be imparted and no such beginning is late. All officers of Union Government are now being trained for GST. Similarly, State revenue officers can also be trained on service tax front. However, we know that how many officers have thorough knowledge of service tax despite service tax being in place since 1994. In some cases, quality of adjudication orders vouch for this.

The 9th GSTC meeting has been able to break the deadlock between Centre and States on the issue of dual control of assessees and territorial jurisdiction.  Good or bad, GSTC agreed on the dual control for both thresholds, i.e. below and above Rs. 1.50 crore limit. The administrates of GST (adjudication, scrutiny, audits) as agreed by GSTC is as follows:

With turnover below Rs. 1.50 crore

  • 90% with states
  • 10% with centre

With turnover above Rs. 1.50 crore

  • 50% with states
  • 50% with centre

However, States will also be empowered to control equally under the integrated GST which may pose practical challenges. GSTC also agreed to states being allowed to have control over territorial waters.

The next (10th) meeting of GSTC has been convened for 18th February, 2017 to have final approval of three laws – CGST, SGST and IGST and compensation law before they are referred to Parliament and State Assemblies. Draft rules shall also be discussed.

As it is, GST may be made applicable w.e.f. 1st July, 2016, i.e., in 2017-18 fiscal, for quarter-I, we will have present tax regime and for remaining three quarters, we will be having GST in place. Hopefully so.

With Union Budget 2017-18 now scheduled to be presented in Parliament on 1st February, 2017, first time in Indian history to be so presented with yet another first – a common Budget of finance and railways, this may perhaps be the last Budget before we have Goods and Services Tax in the country, i.e., last Budget to have Service Tax, Central Excise and Central Sales Tax as part of Budget. This will also be the first Budget to talk about both – Central Excise / Service Tax provisions for a quarter (April – June, 2017) and GST provisions to be levied w.e.f. 1st July, 2017. Also, Budget provisions will be made applicable w.e.f. 1st April for the first time in 2017.

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