GST to Roll-Out from 1st July,

however full Consensus Still Not Achieved

The Goods and Services Tax (GST)
council led by the finance minister Arun
Jaitley has failed to meet consensus on
dual control and taxing rights of goods
moving in high seas. Thus, GST will be
rolled out in India from July 1st which is
three months delayed by its original
date.
We have arrived on a decision on dual
control said the Finance Minister. Dual
control means to split the auditing, administrative and assessing powers between the two
governments under the GST act (namely the State and the Centre). This would help in bring
out the concept of One Tax, One Nation by merging the local and the Centre taxes in a
single charge. This means that GST would club all the indirect taxes together (such as VAT,
Service tax, Sales Tax, etc.).

As per the Proposed Model

The assessment of all the tax payers with an annual turnover of Rs.1.5 crore or less
will be split between the State and the Centre in the ratio of 90:10. All the ministers
accepted this except the West Bengal Finance Minister who wants the ratio to be
100:00.
Assessment of the organizations with a turnover of more than 1.5 crore will be split in
the ration of 50:50 among the state and the Centre respectively.
Intelligence enforcement power will rest between the State and Central government.

More clarity was given on IGST by Arun Jaitley

Integrated Goods and Service Tax (IGST) is levied when the goods and services are moved
from one state to another. For example, if the goods are moved from West Bengal to
Jharkhand IGST will be charged upon such goods. The revenue coming from this tax is
shared by the State and the Centre.
The council led by Arun Jaitley also discussed the issue of taxation of the goods which are
traded high seas. According to the GST bill goods transported through territorial waters come
under IGST.
Anything concerned within 12 nautical miles is part of the Union Government but the State
will be empowered to collect tax on any economic activity in this area.
Jaitley also said that only the Central Government has the power to charge IGST, but there is
a special provision allowing the States to ascertain dual control in the same ratio of
assessment. In the implementation of IGST any debatable issues among the States, the
assessment will be done by the Centre.

Reaffirmation of the GST slab rates

The council had already agreed upon the four slab structure of 5, 12, 18, 28 percent, along
with cess on luxury and sin goods such as Pan Masala and Tobacco. A panel of bureaucrats is
working on the classification of a comprehensive list specifying the tax rate of every
individual good and service.
Thus July 1st is looking like a more realistic date for rolling out GST according to the Finance
Minister. He said that as GST is a transactional tax it can be introduced at any time of the
year.

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Article Written by
Megha Gandhi