Source: News Bharati English20 Mar 2017 13:35:18
New Delhi, March 20: In order to bring the biggest reform in the Indian market, a government of India approved four supporting Goods and Services Tax legislations, paving the way for their introduction in Parliament on Monday. The four supporting legislations are the Compensation Law, the Central GST (CGST), Integrated GST (IGST) and Union Territory GST (UTGST) would be introduced as Money Bill.
Now, India will likely to be able to roll out GST from July 1, three months behind the original April 1 schedule. Finally, the most awaited dream of one nation one tax comes true and will be effective in next three months. The above four Bills have been earlier approved by the GST Council after thorough, clause by clause, discussion over 12 meetings of the Council held in the last six months.
Notably, The CGST Bill makes provisions for levy and collection of tax on intra-state supply of goods or services for both by the Central Government. On the other hand, IGST Bill makes provisions for levy and collection of tax on inter-state supply of goods or services or both by the Central Government.
The UTGST Bill makes provisions for a levy on a collection of tax on intra-UT supply of goods and services in the Union Territories without the legislature. Union Territory GST is akin to States Goods and Services Tax (SGST) which shall be levied and collected by the States/Union Territories on the intra-state supply of goods or services or both.
The Compensation Bill provides for compensation to the states for loss of revenue arising on account of implementation of the goods and services tax for a period of five years as per section 18 of the Constitution (One Hundred and First Amendment) Act, 2016.
Importantly, the Government is committed to the early introduction of GST, one of the biggest reforms, in the country as early as possible. GST Council has decided 1st July as the date of commencement of GST. The Finance Minister Arun Jaitley in his Budget Speech has mentioned that country-wide outreach efforts will be made to explain the provisions of GST to Trade and Industry.
Let’s understand the implementation of GST:
i) All assessees with an annual turnover of Rs 1.5 crore or below will be split on a 90:10 ratio between the states and the Centre. States would assess 90 percent of businesses with an annual turnover Rs 1.5 crore, while the Centre will assess the remaining 10 percent.
ii) Businesses with a turnover of more than Rs 1.5 crore will be split equally with the states assessing 50 percent of such traders and the Centre the remaining 50 percent.
iii) The Centre also gave the right to tax economic activities within 12 nautical miles to coastal states, even as it will be the territory of the Union. At present, these states have the right to tax these activities.
iv) The Centre has broadly agreed to states demand on “dual control” or cross empowerment to split the administrative, auditing and assessing powers between the two governments under GST, which promises to stitch together a common national market by consolidating a web of local and central taxes into a single charge.
v) 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 the law.
vi) Any IGST disputes among states will be resolved by the Centre.