The consensus at the GST Councilmeeting on jurisdiction over assessees as well as fixing roll out date as July1 gives industry the much-needed clarity and additional time for preparing forthe indirect tax reform, experts said.
Dubbing the meeting as watershed moment for GST, DeloitteHaskins & Sells LLP Senior Director (Indirect Tax) M S Mani hoped that thefinal legislation with relevant rules is available to business at least threemonths ahead of the roll out.
"With indication of revised implementation date of July1, 2017 for GST, industry gets much needed clarity and some additional time forpreparation for this huge reform. It appears that government would be able toget the central GST laws passed by Parliament in the second half of budgetsession now," PwC Partner and Leader (Indirect Tax) Pratik Jain said,adding uncertainty surrounding GST is gone now.
BMR & Associates LLP Leader (Indirect Tax) Rajeev Dimrisaid, "Even to achieve the deferred roll out date, finalisation andpublication of GST laws without further delay would be important for India Incto effectively prepare for migration to the new regime."
Mani said that GST roll out from July 1 instead of April 1is welcome as it ends the anxiety of industry to have a firm roll out date inplace.
"Industry would be delighted that there has been aconsensus in today's meeting of the GST Council and a definitive announcementof the roll out date. This would enable businesses to move ahead with preparingfor the roll out from now itself," Mani said, adding it is now imperativethat all businesses complete their GST roll out preparations.
EY India National Leader (Indirect Tax) HarishankerSubramaniam said the development is "very positive" and takes GSTjourney forward. "What remains now are the rates for various goods andservices which I am sure will be decided in March 2017".
In a significant breakthrough in implementation of India'sbiggest tax reform, the deadlock over administration of GST was broken todayafter Centre agreed to allow states control over most of small tax payers butthe rollout date was pushed back by three months to July 1.
"The decision on deferment of GST to July is pragmatic.A well thought through implementation post meticulous discussion on the draftlegislations is far more desirable than a premature rushed through rollout," Dimri said.
"So our next meeting will be on February 18. This longgap is because -- the drafts are going to take some time to be finalised andmost finance ministers would be busy with the central and state budgets,"Jaitley said.
He added that all states, except West Bengal, agreed to theproposal of division of assessees in GST for audit and scrutiny purposes.
"The West Bengal minister disagreed to the limitedextent that assessments below Rs 1.5 crore which are divided 90:10 between thestates and centre. His dissent was confined to the issue that it should be 100versus zero and not 90:10. On all other proposals he also agreed," hesaid.
After the Council meeting West Bengal Finance Minister AmitMitra said the Centre has come very close to the position that empoweredcommittee had taken, where below Rs 1.5 crores, turnover all goods, all deemedgoods, was to be assessed by states.
"Our great struggle has been to save the smallenterprises of states and we have succeeded to the extent of 90 per cent (ofservices) and all goods. We could not succeed in only 10 per cent which relatesto services," Mitra said.
Earlier, Kerala Finance Minister T M Thomas Isaac said therewas no agreement on the issue of administration of GST, with states continuingto seek sole control over tax payers.
With regard to Integrated GST, Jaitley said the power tolevy and collect the IGST taxation is with the central government but byspecial provision in law, states will also be cross empowered in the samemanner of the ratio mentioned earlier.
"In the exercise of IGST where there are contentiousissues between conflicting states with regard to place of supply etc.Obviously, one of the states cannot assess and therefore those assessment wouldtake place by Centre," Jaitley said.
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