The Goods and Services Tax (GST) Council approved draft rules for the proposed levy and agreed to a refund mechanism for central and state tax holidays that will continue under the new regime, marking further progress toward rolling out India’s biggest indirect tax reform by April 1 next year. The GST Council will now meet for three days next month (October 18-20) to settle the few remaining issues and the big question of the tax rate, which is likely to the subject of intense debate. The Centre doesn’t want GST to be too high that it’s inflationary while the state governments don’t want it so low that they lose out on revenue. The discussion on Friday related to five subordinate items of legislation dealing with issues such as registra tion, invoicing and tax payments under GST. These rules will be finally notified only after the GST legislation is passed. “Once the Act is passed by Parliament or by the state legislatures as the case may be, we want the draft rules to be ready so that the rules can be notified immediately,“ said Finance Minister Arun Jaitley , chairman of the council. The council, a representative body of both Centre and states, also agreed on the treatment of exemptions and incentives under GST.These are largely excise breaks to 11 states mostly in the north-east and hilly areas and also some benefits given by states to promote industry. “There would be levy of tax on all exempted entities. Once collected, the levy would then be reimbursed to the exempted entity by state or central government,“ Jaitley told reporters on Friday. There were some differences on decisions reached at the first meeting of the GST Council on service tax assessment because of which its minutes could not be adopted. The differences on decisions taken by the council at its first meeting were with respect to oversight of service tax assessees.
The Goods and Services Tax (GST) Council approved draft rules for the proposed levy and agreed to a refund mechanism for central and state tax holidays that will continue under the new regime, marking further progress toward rolling out India’s biggest indirect tax reform by April 1 next year. The GST Council will now meet for three days next month (October 18-20) to settle the few remaining issues and the big question of the tax rate, which is likely to the subject of intense debate. The Centre doesn’t want GST to be too high that it’s inflationary while the state governments don’t want it so low that they lose out on revenue. The discussion on Friday related to five subordinate items of legislation dealing with issues such as registra tion, invoicing and tax payments under GST. These rules will be finally notified only after the GST legislation is passed. “Once the Act is passed by Parliament or by the state legislatures as the case may be, we want the draft rules to be ready so that the rules can be notified immediately,“ said Finance Minister Arun Jaitley , chairman of the council. The council, a representative body of both Centre and states, also agreed on the treatment of exemptions and incentives under GST.These are largely excise breaks to 11 states mostly in the north-east and hilly areas and also some benefits given by states to promote industry. “There would be levy of tax on all exempted entities. Once collected, the levy would then be reimbursed to the exempted entity by state or central government,“ Jaitley told reporters on Friday. There were some differences on decisions reached at the first meeting of the GST Council on service tax assessment because of which its minutes could not be adopted. The differences on decisions taken by the council at its first meeting were with respect to oversight of service tax assessees.
APRIL ROLLOUT ON RADAR
The government is working towards rolling out GST on from April 1, 2017, Jaitley has said. In his opening remarks at the fourth meeting of the parliamentary consultative committee meeting on Friday, he said progress on GST was “as per schedule,“ the finance ministry said in a statement. Jaitley said that till September 16, 2017, one year after the provisions of the Constitution (101st Amendment) Act, 2016, being brought into force, the Constitution empowers the central government to levy excise duty on manufacturing and service tax on the supply of services. Similarly , the Constitution Amendment Act empowers the state governments to levy sales tax or Value Added Tax (VAT) on the sale of goods till that time September 16, 2016. Members of consultative committee sought various clarifications with regard to the goods and services tax law and offered suggestions for its implementation, the statement said. – www.economictimes.indiatimes.com [1-10-2016]