GST: States to fix bar for administrative control
The Hindu Business Line
November 18, 2016
Keen to engineer a consensus on the issue of administrative control of businesses at next week’s GST Council meeting, Finance Minister Arun Jaitley has called an informal meeting of stakeholders on Sunday.
Sources say the Finance Ministry is keen on cross-empowerment, which would allow officials from both the Centre and the States to audit businesses. The turnover threshold, however, will now be decided by the States.
The GST Council is scheduled to meet on November 24 and 25 to ratify the decision on administrative control, as well as finalise the draft model legislation for Centre, State, Integrated GST and the compensation law.
“It is a matter of reaching a consensus between the States and the Centre through discussion. No one is keen to go in for voting at the GST Council,” noted an official close to the development.
Sources also pointed out that with just about 5 per cent of the cases to be taken up for scrutiny under GST based on the GST Network software, the issue of who will administer the tax is also not very significant.
“Eventually, there will have to be coordination between the Centre and State officials. Simultaneously, most processes relating to filing and compliance will be through the GSTN,” noted another official.
Despite numerous rounds of discussions on who will administer businesses and services under GST, the States and the Centre are yet to reach an agreement on the issue.
Discussions at the last meeting of the GST Council on November 4 also remained inconclusive;among the options discussed were horizontal and vertical division of assessees.
Under the proposal for horizontal division of assesses, the States would be given single control of all assessees with an annual turnover of up to Rs. 1.5 crore, beyond which there would be cross-empowerment of Centre and State officials. In the vertical division, both the Centre and State will get a fixed number of assessees.
Sources had indicated that most States were keen on horizontal division.
The Centre is also keen to reach an agreement on the issue at the earliest to ensure that the subsequent GST Bills can be passed by Parliament and State Assemblies in the Winter Session and the tax rolled out from April 1, 2017.