New Delhi: The centre and the states took another step towards rolling out the goods and services tax (GST) regime on 1 April 2017, agreeing to a range of issues set out in the draft rules, at the second meeting of the GST council on Friday.
There was agreement on rules pertaining to registration, tax payment, refunds, returns and invoices as well on the mechanism for granting area-wise tax exemptions.
But, in a setback of sorts, West Bengal and Tamil Nadu opposed the proposal to allow the centre to exercise administrative control over all existing 1.1 million service tax assesses, as agreed to in the previous council meeting.
This led to the formation of a committee comprising state and central government officials to look into the issue.
In a briefing after the meeting, finance minister Arun Jaitley said some states had expressed reservations about the minutes of the last meeting, specifically the clause that allowed the centre to control all the existing service tax assessees.
“On the issue of service tax assessments in the new dispensation, some states disagreed with the interpretation of the decision in the last meeting and discussion remained inconclusive. The issue is where both the centre and the states levy tax on services,” he said, adding that the aim is to arrive at a consensus on all issues.
An official present at the meeting said Tamil Nadu and West Bengal favoured only bringing service tax assessees up to a threshold of Rs1.5 crore under the control of the centre. For assessees above this threshold, the states want sharing of control.
The contentious issue of tax rates will be taken up at the next meeting of the council on 18-20 October.
The calculation of the annual increase in tax revenues for arriving at a compensation figure will also be decided at the meeting. GST will unite the country into a common market and remove barriers across states.
An agreement on all issues before the last week of November will be crucial to meet the 1 April 2017 deadline.
At the meeting, the five sets of draft GST rules were passed but they will be notified only when the GST law is passed by Parliament.
Earlier this week, the centre had put up the draft—aimed at minimizing public interface and reduce harassment–in the public domain (see here: http://bit.ly/2cGmc1f andhttp://bit.ly/2cQQTiL).
The finalization of the rules will help industry align information technology systems for moving towards GST.
The council also agreed that GST will be levied on all exempted entities which will be then returned to taxpayers.
Refer : http://www.livemint.com/Politics/Oz4sVb1O4jmmhjk5ZqemJO/GST-council-agrees-on-five-areas-differs-over-decisions-tak.html