NEW DELHI: Finance Minister Arun Jaitley and state governments made significant progress at the ninth meeting of the GST Council with an agreement to allow states control over most of small taxpayers. However, the rollout date has been pushed back by three months to July 1, 2017. “GST Council has finally found some beginning for the GST roll out. After 4-5 years of struggle for implementation, the teething problems are getting resolved,” says Aman Agarwal, Professor at the Indian Institute of Finance.
According to the deal reached on Monday, states will have powers to assess and administer 90 per cent of the tax payers under Rs 1.5 crore annual turnover while the remaining 10 per cent would be controlled by the Centre. For tax payers with more than Rs 1.5 crore turnover, states and the Centre will control and administer them in 50:50 ratio.
The Finance Minister said each tax payer would be assessed only once and by only one authority. “For small and medium traders this is a very good sign and assurance,” says Amairulla Khan, visiting professor at the Amity International University. The Centre also agreed to the demand of coastal states, allowing them to tax economic activity within 12 nautical miles, even though constitutionally, the Centre has jurisdiction over territorial waters. “This is a significant headway,” Jaitley said.
The GST Council will take up the draft of Integrated GST(IGST), the tax which will be levied by the Centre on inter-state movement of goods and services, as well as State GST and Central GST in the next meeting of the Council on February 18. In its previous meeting, the Council agreed to a four-rate tax slab of 5, 12, 18 and 28 per cent.