HIGHLIGHTS OF THE GST COUNCIL MEET ON 16.01.2017

GST update 19.01.2017 HIGHLIGHTS OF THE GST COUNCIL MEET ON 16.01.2017

GST DAILY DOSE OF UPDATION

HIGHLIGHTS OF THE GST COUNCIL MEET ON 16.01.2017:-

The Hon’ble Finance Minister, Mr. Arun Jaitley announced the revised deadline for the passage of revolutionary taxation reform being GST to be implemented from 01.07.2017. The key decisions taken during the course of meeting are detailed as follows:-

The first and foremost issue that has been a matter of distress and a big hurdle in implementing the GST by the next financial year is dual control of Centre and State in GST assessment. There has been a constant demand from States to have exclusive jurisdiction on assessees having turnover upto Rs. 1.5 Crores. The GST Council meet that was held recently has resolved the dual control dispute wherein it has been conceded that 90% of assessees with turnover upto Rs. 1.5 Crores will be assessed for scrutiny and audit by State authorities while the remaining 10% will be assessed by the Centre. Furthermore, assessees with turnover above Rs. 1.5 Crores will be assessed by Centre and State Government in the ratio of 50:50. However, as far as the anti-evasion work is concerned, Centre and State will have equal jurisdiction and there is no restriction. Although, it was reported that the mechanism of determining the assessee base will be computer software oriented, but it seems to be a matter of big worry as far as assessees are concerned. Since, the ratio of assessees that will be assessed by Centre or State depends on the quantum of turnover, assessees with turnover upto 1.5 Crores will definitely face problems when their turnover will cross Rs. 1.5 Crores. This is for the reason that on assessees having turnover above Rs. 1.5 Crores, the ratio of assessment is 50:50. Till date, no clarity has been given on how the assessees will be intimated about the change in the jurisdiction of their assessing authority on crossing turnover of Rs. 1.5 Crores and this is surely a matter of concern as assessees cannot switch between the assessing authorities frequently. It can be said that it appears that the problem of dual control has been resolved but in reality, it is assessees who will be made victim of such ambiguous solution.

The second issue that was also reason for opposition was taxation rights of States in territorial waters. The Centre has also agreed on the taxation rights of the States over the sea. Territorial waters extending to 12 nautical miles fall under control of the Union Government but States will be empowered to collect tax on any economic activity in this zone. This decision will also have a great impact on the administrative power of the Centre in GST regime as States will also be empowered to collect tax. However, consensus has been made that in case of any dispute pertaining to IGST among States, the dispute will be resolved by the Centre.

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GST update 19.01.2017 HIGHLIGHTS OF THE GST COUNCIL MEET ON 16.01.2017

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