GST: Centre to share redrafted model law with states tomorrow
Mon, Nov 14 2016. 06 54 PM IST
The centre will share the draft model Goods and Services Tax (GST) law with the states on Tuesday.
The compensation law will be shared with the states on 16 November detailing the procedure for making good revenue loss of states in the first five years of GST rollout. Photo: AP
New Delhi: The centre will share the draft model Goods and Services Tax (GST) law with the states on Tuesday as it prepares for the rollout of GST from 1 April next year, Central Board of Excise and Customs (CBEC) chairman Najib Shah said on Monday.
The centre is also working on multiple options apart from ‘horizontal’ and ‘vertical’ division for deciding on jurisdiction over tax assessees, he said.
“We are very hopeful of GST implementation from 1 April, 2017. By tomorrow we will share the model GST law with the states which has been redrafted after taking into account the comments of stakeholders,” Shah said while inaugurating the CBEC pavilion at the 36th India International Trade Fair (IITF).
Shah said the compensation law will be shared with the states on 16 November detailing the procedure for making good revenue loss of states in the first five years of GST rollout.
The CBEC has taken up GST as the theme for its IITF pavilion and it tries to educate people about the new taxation regime which is expected to roll out from April next year. The GST will subsume excise, service tax, value-added tax (VAT) and other local levies and will help in smooth movement of goods and services across the country.
The centre and states have already decided on a four-tier GST rates—5, 12, 18 and 28%—but is yet to decide on the issue of cross empowerment to avoid dual control.
Differences arose with the states demanding control over 11 lakh service tax assessees, and the centre proposing to do away with the states having exclusive control over all dealers up to an annual revenue threshold of Rs1.5 crore—an issue which was settled in the first meeting of the GST council.
The GST council has arrived at an option of two proposals—horizontal division and vertical division. ‘Horizontal division’ would mean taxpayers would be divided both for administrative and audit purposes based on a cut off turnover. Those with a turnover over Rs1.5 crore would be administered both by the centre and states, while those with below Rs1.5 crore would be administered solely by the states.
Under the ‘vertical division’, taxpayers could be divided in a ratio which would balance the interest of the centre and the state, both with respect to revenue and spread of numbers.