Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 24-1-2017 Last Replied Date:- 24-1-2017 – GST 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 ₹ 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
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states being allowed to have control over territorial waters. Though general consensus is being looked at, States like West Bengal and Kerala still continue to be in opposite camp. The Centre and States have agreed to share the entire taxation base for assessment with a horizontal division. According to the agreed formula, which will apply for both goods producers and service providers, States will have the power to assess 90 per cent of all assessees with a GST turnover of ₹ 1.5 crore or less and the remainder will be with the Centre. Further, assessees with a GST turnover of over ₹ 1.5 crore will be assessed in a 50:50 ratio by the Centre and States. Intelligence-based enforcement powers will vest with assessing officers of both the Centre and States for all assessees. Both have agreed that no assessee would be controlled by two authorities and there would be computer-based enforcement at both the Centre and the states. Those assessees who fall under the integrated GST,
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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. Even if it is delayed beyond July 2017, the transition may not be an issue as it is a transaction tax. July may be a reality, hopefully so. GST Council is also understood to be working on tax rate structure for services. This could be in 2-3 slabs for basic, standard and luxury / high end services. If this is through, we will end up in having too many GST rates which may not be desirable. It is expected that finalizing of segment wise GST rates will take some more time. On industry front, as the date comes nearer, there are going to be major challenges which inter alia include cash flow management, working capital, logistics, IT solutions, inventory planning and so on. Planning on all these fronts is subject to final law, rules, rates and credit / refund rules. With Union Budget 2017-18 now scheduled to be presented in Parliament on 1st February, 2017,
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