The composition of Goods and Services Tax Network (GSTN), a private company tasked to create Information Technology infrastructure for GST, is under examination to give to the Centre majority stake in it.
The government of India presently has 24.5 per cent stake in GSTN while state governments together hold another 24.5 per cent. The balance 51 per cent equity is with non-government financial institutions, like HDFC Bank, ICICI Bank and LIC Housing Finance.
The development comes after apprehensions were raised against GSTN by many stake holders including association of Indian Revenue Service (Customs and Central Excise) officers.
It had said since GSTN is funded by the central and state governments, there is no justification in entrusting its management to private individuals with heavy salary and allowance.
"The central government is examining GSTN and may hold majority stake. This move has addressed our concern that such a valuable asset should not be controlled by private entities," a spokesperson of the IRS association said. The association said that the model Goods and Services Tax (GST) law and rules are being framed. "Over 60,000 officers from the central and state governments are being trained by IRS officers, awareness to trade and industry is also being created," the spokesperson said.
The Centre has also notified GST Council, to be headed by Finance Minister Arun Jaitley, which will decide on the tax rate, exempted goods and the threshold under the new taxation regime.
The government is planning to introduce GST legislations -- Central GST (CGST) and Integrated GST (IGST) -- in Winter Session of Parliament in November. Prime Minister Narendra Modi has also directed all officers to ensure that steps are taken to stick to the April 2017 roll out date. "The officers have shown their readiness and determination for the successful implementation of the GST as called from by the Prime Minister," the IRS association said.
Meanwhile, the revenue department is likely to issue clarification on legality of levying excise duty by the Centre on various commodities till implementation of goods and services tax (GST) from April 1, 2017. The clarification is expected to address the doubt being raised by certain experts about the legality of levying excise duty during the interim period before the GST rollout. The other view is that the Centre has widespread power under Entry 97 of the Union List to levy taxes on any products. The confusion arose following the notification of certain clauses in the GST Constitutional Amendment with effect from September 16.
As per the notification, Entry 84 of the Union List has been amended to include only petroleum crude, high-speed diesel, petrol and natural gas. It would mean that the Centre can levy excise duty only on these products.
Earlier, Entry 84 of the Union List of the Constitution allowed the Centre to levy excise duty on tobacco and other goods with the exception of potable alcohol, opium and narcotic drugs.
In view of these amendments, it is being speculated on whether the government can legally collect excise duty till the day GST, which will subsume excise duty in addition to service tax and other levies, is implemented. Experts, however, are of the opinion that Entry 97 of the Union List gives widespread power to the Centre to levy taxes on goods which are not mentioned in any List under the Seventh Schedule of the Constitution.
Entry 97 says that the Centre will have powers on "any other matter not enumerated in List II or List III, including any tax not mentioned in either of those lists".
List II under the Seventh Schedule of the Constitution deals in subjects on which states have legislative powers while List III is the concurrent list wherein both the Centre and states can make laws.
Nangia & Co Director Rajat Mohan said, "The government may say the power to levy excise, service tax could be drawn from Entry no. 97 from the Union List which is residuary entry. "The power to levy state taxes i.e. VAT, entry tax and Octroi etc. could be drawn from Section 19 of The Constitutional (One Hundred and First Amendment) Act, 2016."