Consequent upon Constitution of GST Council (GSTC) in terms of article 279A of Constitution of India and Section 12 of 101st Constitutional Amendment Act, 2016 coming into force w.e.f. 12.09.2016, the first meeting of newly constituted GSTC was held on 22-23 September, 2016 under the Chairmanship of Union Finance Minister. The GSTC has acted proactively and fast on taking forward the initiatives to introduce GST in country as early as on 1st April 2017.
As it is, it appears that things are in place and major decisions concerning GST may be taken as anticipated to ensure that GST see the light of the day on 1st April 2017, barring unforeseen situations, which could be political or legal hurdles.
Not only this, GSTC has decided the future course of action along with the dates and agenda for the meetings.
GSTC has in last two days freezed certain issues by consensus, some of them being–
- The GST Council agreed on exemption thresholds:
- Exemption from GST for annual turnover less than ₹ 20 lakh for rest of India,
- Exemption from GST for annual turnover less than ₹ 10 lakh for North Eastern and hill states.
- Dual control over the GST assessees in case of goods:
- Annual turnover less than ₹ 1.5 crore to be assessed by States,
- Annual turnover of 1.5 crore or more to be assessed under dual control.
- Existing Service tax assessees to remain with Centre, (at present 1.1 million service taxpayers) and new GST assessees with annual turnover up to ₹ 1.5 crore will be shared with state authorities after due training .
- Agreement to subsume all cesses into the new tax.
- Adopted a cross-empowerment model for tax administration under which tax administrators will use a formula to decide which assessee they will audit or register. The taxpayer will then have to interact with one authority only- either Central or State to avoid dual control.
- GSTC to work on a compensation law and compensation formula; Base year of compensation to states to be 2015-16.
- Only five per cent of the cases would be audited under the GST regime.
- The compounding tax threshold for traders has been set at ₹ 50 lakh. Those with an annual turnover between ₹ 20 lakh and ₹ 50 lakh will have the option of paying a tax rate of one to two per cent instead of the full GST rate.
- All states agree on date and GST likely to be introduced by April, 2017
Agenda for future meetings of GST Council:
- September 30: To approve exemption list and consider draft rules
- October 17-19: To decide GST rates and tax slabs
Let's hope that the GSTC will steer the roll out of GST sooner or later but certainly not never.
