A STEP AHEAD IN THE DIRECTION OF UNANIMOUS GST
By: – Nagesh Bajaj
Goods and Services Tax – GST
Dated:- 3-8-2011
The comments of the Department of Revenue (DOR) on the 'First Discussion Paper on GST' reflect the inclination of Centre on different contradicting issues related to Goods and Services Tax (GST). On some issues the DOR agrees with the recommendations of the Empowered Committee of State Finance ministers (here-in-after referred as EC) while on some varies with it.
Comments of 'DOR' on different significant issues and their consequences are as under:
GST Model
The 'DOR' is agreed with the dual GST model having two components: CGST (Central GST) and SGST (State GST), recommended by the EC with appropriate binding m
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ommon base for taxation between Centre and States.
Accounts where CGST, SGST and IGST should be paid
Ministry's view:
CGST should be paid to the accounts of the Centre.
SGST should be paid to the accounts of the states.
IGST should be paid to the accounts of the Centre.
Account-heads for all good and services would have an indication whether it relates to CGST or SGST (with identification of the state to whom the tax is to be credited).
Input Tax Credit
The Centre is agreed with the states recommendations on input tax credit. It means that the taxes paid against CGST should be allowed to be taken as input tax credit (ITC) for CGST and could be utilized only against the payment of Central GST. The same principle will be applicable fo
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orm procedure for collection of both CGST and SGST may be prescribed in the respective legislation for CGST and SGST, to the extent feasible. 'It is proposed to prescribe a common registration form, common registration number, common return format, common service centers for acceptance of registration applications and return for Central GST and State GST.'said Sushil Solanki, Commissioner, Central Excise.
Threshold limit
The 'DOR' is of the view that there should be a uniform threshold for goods and services for both SGST and CGST. This annual turnover threshold could be ₹ 10 lakh or even more than that. The threshold should not apply to dealers and service providers who undertake inter-state supplies.
A problem of dual control may
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