Get Free Financial Suggestion Here
GST Rollout from July 1 as Centre, States Reach Deal Courtesy : The Economic Times

States to assess 90% taxpayers with turnover under Rs 1.5 cr, rest with Centre; States & Centre to share control for turnover exceeding Rs 1.5 cr
India will likely be able to roll out the goods and services tax (GST) from July 1 following a breakthrough on Monday over the seemingly intractable issue of tax administration after the Centre accommodated sta tes’ concerns.
“It’s a significant head way,“ Union Finance Mi nister Arun Jaitley said after a day-long meeting of the GST Council with both sides agreeing on most matters.

Under the proposed tax regime, 90% of all assessees with a turnover of `1.5 crore or less will be assessed for scrutiny and audit by state authorities, the remaining 10% by the Centre. Above that limit, Centre and states will assess in a 50:50 ratio. The agreement hammered out was based on a proposal by Tamil Nadu.

“Each assessee would be assessed only by one authority,“ Jaitley said, putting to rest fe ars over dual administration by both state and the Centre.“You won’t have to jump from authority to authority, that’s the advantage of GST… Computer programming will be done in such a way that there is no discretion (in selection of assessees).“

This division of tax administration had been holding up the finalisation GST tax laws, making it difficult for the government to stick with the April 1 deadline. The GST Council, which has Jaitley as chairman and state ministers as members, resolved to share the entire taxation base between the assessment machinery of the Centre and the states.

Both will have intelligencebased assessment powers, Jaitley said. The Centre has also given leeway to states on integrated GST (I-GST), which deals with inter-state sales. Jaitley said the power to levy and collect the I-GST lies with the central government but states will also be cross-empowered in the same ratio as above through a special provision in law. Any IGST disputes among states will be resolved by the Centre.

Regarded as one of India’s most sweeping reforms since Independence, GST will help turn the country into a common market by removing state tariffs that act as a barrier to free movement of goods and services. The accord will come as a relief to the Centre after concerns that the November 8 demonetisation may cause states to put up their price. To be sure, the constitutionally mandated timetable requires GST has to be in place by September at the latest.

Jaitley said all ministers present at Monday’s meeting agreed to the proposals except West Bengal finance minister Amit Mitra. The state wanted exclusive jurisdiction for states up to the limit of `1.5 crore. Other states did not support West Bengal’s demand, said an official present at the meeting. On the other hand, states such as Assam and Maharashtra demanded a higher number of assessees above the `1.5 crore threshold and fewer below.

The Centre also ceded ground on taxation rights over the sea. Territorial waters extending to 12 nautical miles fall under control of the union government but as per convention, states will be empowered to collect tax on any economic activity in this zone. “This decision has been taken after very wide consultations,“ Jaitley said.

“It’s indeed a very positive development and takes GST journey forward,“ said Harishanker Subramaniam, national leader, indirect tax, EY India. “What remains now are rates for various goods and services, which I am sure will be decided in March 2017.“


The council decided on a new timeline for GST’s rollout factoring in three key pending matters -final draft legislation and rules, approval of these by legislative bodies and setting of rates for the slabs agreed. “There was a broad view that first of July appears to be more realistic,“ Jaitley said, adding that GST is a transactional tax and can be introduced any time. He said ministers also felt that industry and trade will have to be given adequate notice and once the rates are decided, the GST Network’s system will have to be modified suitably. The GSTN is GST’s technological backbone.

Tax experts said the latest developments will help industry prepare for the new regime.

“With indication of revised implementation date of July 1, 2017, for GST, industry gets muchneeded clarity and some additional time for preparation for this huge reform,“ said Pratik Jain, leader, indirect taxes, PwC India.

Rajeev Dimri, leader, indirect tax, BMR & Associates LLP , said, “Administrative control with a single authority (either Centre or state) would ensure ease of compliances and assessment for assessees.“

© 2012 Centre for Tax Awareness and Research Design and Developed by

During my 37-year-old career with Income Tax department, I moved from place to place, post to post. For me, every posting was a challenge, and at the same time an opportunity to deliver.

After my retirement as Chairman of Central Board of Direct Taxes, I was invited by various institutions and NGOs to deliver talks on tax matters. While advising taxpayers across sectors, I noticed, our vast salaried class including armed and paramilitary forces, pensioners or senior citizens, NRIs, professionals and small business establishments need the right guidance. Most taxpayers do comply with their tax obligations fully. Yet, they are not somehow relaxed and are burdened with anxieties. A large number of taxpayers are not even aware that getting tax refund on time is a basic right.

In one such meeting, a middle-aged man quizzed me why could not I give tax advice 24X7. For a moment, I had no answer. He then added that I should give tax solutions online so that he does not need to come from a remote place to attend my lecture. I thanked him for his suggestion.

For a while I was restless. Already I had got myself enrolled as a Member of the Bar Council of Delhi and as an Advocate of Delhi High Court Bar Association, thanks to my law degree from the University of Allahabad. Yet, I was not sure how I could help the vast majority of taxpayers who somehow maintain a safe distance from the taxmen. I then tossed the idea of creating a tax think-tank with some of my former colleagues and highly spirited individuals. All of us immediately agreed on one count: millions of Indian taxpayers expect to access tailor-made tax research materials and seek guidance from those who have been parts of the tax machinery for decades.

That is how CTAR was born. So, be a part of our passionate journey to explain tax laws and rules in simpler words. Just drop us a few lines on any query related to direct and indirect tax or FEMA. We are at your assistance. We also look forward to hearing your experiences while dealing with the system.