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Dual control issue resolved, July 1 likely date for GST: Jaitley

 IANS |  2017-01-16 21:30:42.0  |  New Delhi

Dual control issue resolved, July 1 likely date for GST: Jaitley

Declaring that the Centre and the states have agreed on a formula to resolve the issue of dual control under the proposed Goods and Services Tax regime, Finance Minister Arun Jaitley on Monday said the coming July 1 appeared to be a "more realistic" option for implementing GST instead of the earlier targeted rollout date of April 1, 2017.

Briefing reporters after the ninth meeting here of the GST Council chaired by him, Jaitley said the time required from now to finalise the GST draft legislation and rules and its passage by state legislatures meant postponing the earlier implementation target date. 


"The broad consensus is that the first of July appears to be a more realistic date," Jaitley said with reference to the new GST rollout target.

"Besides, industry and trade also have to be given adequate notice to prepare for GST," he said. 

The Finance Minister said the differences between the Centre and the state governments on the issue of dual control has been resolved.

"Decision has been arrived at on the cross-empowerment and dual control issue of GST. The entire taxation base is to be shared between assessment machinery of Centre and states," he said. 

"As per the understanding between the Centre and states, 90 per cent of the GST taxpayers with up to Rs 1.5 crore turnover will be assessed by states, while 10 per cent will be assessed by the central government. 

"As far as those above Rs 1.5 crore turnover is concerned, the assessment will be done on a 50:50 basis between the Centre and states," he added. 

The states have been demanding exclusive control on businesses with turnover below Rs 1.5 crore (the current threshold for central excise), including the service taxpayers.

Earlier, Kerala Finance Minister and GST Council member Thomas Isaac emerged from the meeting to say that Tamil Nadu had proposed the formula that was finally approved. 

"Tamil Nadu has presented a compromise formula whereby states will have control over small assesees with turnover less than Rs 1.5 crore, while a small percentage of assesees... 10 per cent, could be given to the Centre for audit purposes," Isaac said.

On the other contentious issue of territory jurisdiction, Jaitley said states will be empowered to tax any economic activity in territorial waters up to 12 nautical miles.

"As far as the area of 12 nautical miles is concerned, this territory is of the Union. States will be empowered to collect tax on economic activity in this territory," he said.

The Centre's earlier proposal to tax transactions that take place within 12 nautical miles from state borders has been opposed by several states, which stand to lose substantial revenue in this way.

Jaitley also announced that the next meeting of the Council to finalise the draft legislations will be held here on February 18. 

Emerging from the meeting earlier, Isaac told reporters that as no consensus had emerged on the issue of dual control over assessees under the proposed GST, there was very little possibility of the new indirect tax regime being implemented by the targeted deadline of April 1.

He also said that no dates had been decided for the next meeting of the Council.

Eight earlier meetings of the Council have failed to resolve the deadlock between the Centre and the states on the issue of "cross empowerment", or dual control of assessees, and who will exercise control over them.

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