Gearing up for the roll out of GST from April 1

Gearing up for the roll out of GST from April 1

FMs to meet industry chambers to discuss model GST law

New Delhi: Gearing up for the roll out of GST from April 1, the state finance ministers will meet representatives of trade and industry on August 30, to sort out vexed issues like place of delivery of services, registration of entities and intra-company services.The meeting comes in the backdrop of certain procedural issues raised by the trade and industry with regard to implementation of the Goods and Services Tax (GST), which will create an unified market with a single rate of tax.The Empowered Committee of State Finance Ministers on GST, headed by West Bengal Finance Minister Amit Mitra, will meet representatives of CII, Ficci and Assocham, among others.During the meeting, industry is likely to demand that location of supplier of goods and services and location of recipient of goods and services need to be defined in the subsequent legislations so that there is no ambiguity.The government targets to roll out GST from April 1, 2017, and to this effect it has to bring two legislations — CGST and IGST — detailing the new tax code in the Winter Session of Parliament in November. Similar tax law SGST will also have to be passed by the states.The GST Constitutional Amendment Bill was passed by Parliament earlier this month and so far three states, Assam, Bihar and Jharkhand, have ratified the Bill. A constitutional amendment requires ratification by at least 50 per cent of the states.Revenue Secretary Hasmukh Adhia has already held meetings with 10 sectors, including telecom, IT/ITeS, banking, e-commerce and tourism, to understand their concerns.During the meeting, e-commerce players flagged compliance issues under GST as these operators would be responsible for collecting tax at source from sellers.The ecommerce companies want that onus of paying taxes to be shifted to the supplier, an official said, adding this is not possible as tax compliance has to be borne by an aggregator.Further tourism sector wants that foreign tourists stay in India be treated as exports and no GST be levied on them.The Constitutional Amendment Bill did not have the GST rate and the GST Council, which will have representation from both the Centre and states, will now work out a rate.The subsequent legislations Central GST (CGST) and Integrated GST (IGST) — would mention the GST rate.A panel headed by Arvind Subramanian had last year suggested 17-18 per cent ‘standard’ rate for bulk of goods and services while recommending 12 per cent for ‘low rate goods’ and 40 per cent for demerit goods like luxury car, aerated beverages, pan masala and tobacco. For precious metal, it recommended a range of 2-6 per cent.

Source fpj