GST DAILY DOSE OF UPDATION

GST Update 10.11.2016

In continuation of our mail of distribution dispute between the State and Centre, even if both agree for the division of assesees but due federal structure of GST in India will lead to dual control. As already wrote by us in our previous update that the refund is to be governed by both Centre and state tax administration which clearly underline that there is dual control on the assesses.
Even we look at the Anti evasion wings of state and central government tax administration will have control on all the assesses. Even this was clear from the communication by the Finance minster. This again shows that there will be dual control under the new GST regime.
The same is position with the adjudication process also. There will be separate demand for CGST and SGST by separate officers. Even the draft CGST law, SGST law and IGST law has different provisions for the same. Hence, it is inbuilt in the law that there will be dual jurisdiction. Hence, it is not only limited to audit of units but the refund, Anti evasion and adjudication process brings about that there will be dual control under this system of GST.
But there is difficulty in implementation of this division of assesses by centre and state. Even there will be great difficulty in administration of some assessees of same trade by State administration and some assessees by central tax authorities. This may lead to a situation where the product of particular trade is classified differently by state authorities as well as by central authorities. To have a better understanding, say for example, one luxury car manufacturer may fall under jurisdiction of state and another manufacturer of same cars may fall under jurisdiction of central authorities by this division of assesses. The luxury car may be classified differently by state tax authorities and Centre tax administration. One manufacturer may be paying different duty and other might be paying different duty. But the tax implementing authorities of state and centre will be governed by different board and will follow the instructions of their respective board only. This will create total confusion. Even the trade and industry will demand uniformity in administration. Looking to the same, it is advisable that there should be division of assessees on functional basis. Say all the manufacturer manufacturing particular product should be governed by state authorities only. This will lead to uniformity of administration of all assessees. Then there will not be any controversy. But it is not so easy as said by us. There will different state authorities working under their respective state administration. They will not follow the instructions issued by other state tax administration. Hence, there is inbuilt confusion and treatment of particular trade and industry in this GST regime. It will be very difficult to implement uniformity in this GST regime by such division of assessees. Hence, even the trade and industry might demand dual jurisdiction to bring uniformity to current GST regime. By doing dual jurisdiction, at least one authority will be there which have jurisdiction all over India and it will implement uniformity in taxation.

We will carry some other topic in our next update.

Comments

GST Update 10.11.2016

Post a Comment

Query