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GST Council – Consensus on Dual Control

Consensus is reached on the issue of dual control in the meeting of the GST Council on 16th January,2017, the Finance Minister Arun Jaitley announced.

The division of Audit and Assessment responsibility between the Central and State Government would be:

State Authorities

90% of the assessees with Annual Turnover of less than Rs.1.5 Crores
50% of the assessees with Annual Turnover of more than Rs.1.5 Crores

Central Authorities

10% of the assessees with Annual Turnover of less than Rs.1.5 Crores
50% of
the assessees with Annual Turnover of more than Rs.1.5 Crores

The division of assessees between the two authorities to be through a computer programme.

Intelligence based enforcement would be by both State and Centre.

Sri Arun Jaitley also stated that Power to levy and collect IGST is with central government. However by a special provision in law, States would be empowered to collect IGST and that where there is a contentious issue like Place of Supply of Goods / Services involving different States, the assessment would be by the Central Authorities.

He also stated that the area of upto 12 nautical miles from the Coastline is part of Union Government but as per convention States would be empowered to levy tax.

Realistic date of Implementation

What is still to be worked on are

a) Final approval of the GST Draft Laws incorporating the amendments decided upon by the GST Council

b) Fitment of Goods/Services in the various agreed slab rates which is expected to be taken up after the final draft law is finalized.

c) Decision on Appellate jurisdiction

d) Modifications to GSTN to incorporate the finally approved law

e) Approval by the Parliament and State Legislatures.

On a realistic date of implementation of GST, Sri Arun Jaitley stated that the consensus is July 1,2017.

The next meeting of the GST Council is scheduled on 18th February,2017 to approve the finally revised draft law.

With so much more ground to be covered, it appears to us that meeting the revised deadline would be challenging.

Date : January 16, 2017

GST Enrolment for existing Central Excise / Service Tax Assessees

All existing Central Excise and Service Tax assessees will be migrated to GST starting 7th January 2017. The Provisional ID and Password of the assessees is provided by CBEC in https://www.aces.gov.in/.

Click to download circular of CBEC on Migration of Registration to GST.

Click to download GST Migration Process.

Please note that those who are registered under State VAT Act and are also registered under Central Excise or Service Tax, the migration would be using the provisional ID provided by State VAT Authorities.

The provisional ID provided in https://www.aces.gov.in/ by CBEC is relevant only to assessees who are presently registered under Central Excise or Service Tax and not under the State VAT Act.

The last date is 31st January,2017

No Decision yet on Dual Control

For those of you who were expecting decisions from the GST Council facilitating early implementation of GST, there is disappointment in that the impasse on Dual Control besides other issues like Jurisdiction over Territorial Waters, Split between SGST and CGST of the agreed rate structure continues.

Administration of IGST is also an issue that is being deliberated upon.

The GST Council meets next on 16th January, 2017 to decide on the issues and if there is consensus, the Central Legislations CGST, IGST and GST Compensation Law can be taken up in the Budget Session of the Parliament.

The divergence of views and constructive deliberation for convergence augurs well for fiscal federalism though the implementation of GST gets delayed.

Image courtesy: riseperformancegroup.com
Date : January 4, 2017

 

Migration of Excise /Service Tax Assessees

GSTN has announced the revised Enrolment Schedule for existing Service Tax and Central Excise Assessees who are not registered under the State VAT Act. The revised schedule is

Enrolment of Taxpayers who are registered under Central Excise Act but not registered under State VAT

05-01-2017

31-01-2017

Enrolment of Taxpayers who are registered under Service Tax Act but not registered under State VAT

09-01-2017

31-01-2017

New registration under VAT/Service Tax/Central Excise after August 2016

01-02-2017

20-03-2017

GSTN has also made available % of enrolment in different States.

Click to view the revised Enrolment Schedule

Date : January 3, 2017

 

GST Council – Meeting on 03/01/2017

GST – Jurisdiction over Territorial Waters discussed

It is learnt from press reports that Certain Central Ministries and representatives from service sector - Software, Telecom, Banking and Insurance Railways – made presentations on their concerns, to the GST Council. Their main concern is that they require centralized registration, as in present service tax legislation, since they render services across India.

It is also reported that the demand for States for jurisdiction over Territorial Waters and certain issues in IGST Act was also discussed. Certain States charge State Taxes ( VAT/Sales Tax) on transactions within 12 nautical miles from the coast line. The IGST law vests this right with the centre. Since this is a Constitutional issue it is learnt that legal opinion would be taken on this issue. The issue is the definition of “State” and how far into the Territorial Waters its jurisdiction extends.

Briefing the press, Sri Amit Mitra elaborated on the issues in the Compensation for revenue loss to States already agreed upon and that post demonetization the quantum of compensation would be higher than projected earlier. He said that the Central Government will have to find ways and means of meeting the commitment to compensate revenue loss for the first 5 years of implementation of GST.

The issue of Dual Control and discussion on the probable roll out date may take place on 4th January, 2017.

The three legislations are yet to be finally approved by the GST Council. What has to follow is the decision on fitment of Goods and Services in the agreed rate of tax structure and the approval of the Rules.

Date : January 3, 2017.
 

GST Council – Meeting on 23/12/2016

Some progress on draft legislation

Briefing the press after the meeting of the GST Council on 23/12/2016 Shri. Arun Jaitley stated that the Primary draft of CGST and SGST law and the five schedules were cleared except provisions in the draft law relating to dual control and cross empowerment.

Since wordings/ language of few other provisions require redrafting he mentioned that the revised draft would be circulated to the States for finalizing in the next meeting.

He also stated that the GST Council cleared basic draft of the GST Compensation Law and that the language of the provision relating to source of compensation fund is to be redrafted for discussion in the next meeting and that it was agreed that compensation would be disbursed once in two months.

The GST Council is meeting again on 3rd and 4th January 2017 to discuss draft IGST legislation and the contentious issue of Dual Control / cross empowerment. One issue Shri Jaitley mentioned is the definition of “Territory of the State”, which he stated is a matter of Constitutional interpretation. One issue for discussion is whether powers to administer IGST can be shared with the States or should it be by the Central Government.

The issue of approval of the Rate of Tax Schedules remains and maybe it would be taken up by the GST Council after all legislative approvals, issue of compensation and cross empowerment are decided.

West Bengal Finance Minister and Chairman of the Empowered Committee of State Finance Ministers stated that in the current Financial Year the States would face huge revenue shortfall and that the estimates of revenue loss to States could be around 70,000 to 80,000 crores. It appears that the States would want a relook on the quantum of compensation in the wake of the demonetization.

Well, there has been considerable progress with each meeting of the GST Council and in this meeting many technical and procedural issues have been cleared.

There is definitely progress towards early implementation and the GST Council is hastening slowly.

Date : December 23, 2016
 

GST Council – Meeting on 22/12/2016

In the GST Council meeting held on 22/12/2016 it is reported that the provisions of the draft CGST legislation was discussed.

The Annual General Meeting of the Empowered Committee of State Finance Ministers is being held after the conclusion of the GST Council meeting.

It is expected that the issue of Cross Empowerment / Dual Control of Central and State Administrators would be discussed in the meeting of the Empowered Committee.

Date : December 22, 2016
 

GST – Duel on dual control

With the GST Council set to meet on 22nd and 23rd December, 2016 to discuss on the issue of cross empowerment / dual control over administration of assessees besides consideration of the draft legislation, our editor Sri. S. Sridharan has discussed his views on this issue.

He opines that in the interest of efficiency Audit of Assessees is ideally by a team comprising State and Central Administrators.

Click to read the article titled Duel on dual control

Date : December 20, 2016
 

GST Council – Meeting on 11/12/2016

GST – April 1,2017 Rollout Improbable

The GST Council met on 11th December, 2016 to continue the deliberation on the draft legislations and the issue of dual control.

Briefing the Press, Sri Arun Jaitley stated that 99 sections of the draft CGST/SGST legislation was discussed and that few provisions require redrafting and few provisions relating to issue of control over administration of assessees were deferred pending decision on the issue of dual control.

The next meeting of the GST Council is scheduled on 22nd and 23rd December when the remaining provisions of the draft CGST/SGST legislation would be discussed. It is expected that the draft IGST legislation and CST Compensation legislation would be discussed besides the contentious issue of dual control.

It appears from press reports that since IGST Act is to be administered by the Central Government, the issue of dual control would centre around this aspect.

While Sri Jaitley stated that the Government stands by the scheduled date of implementation of April 1,2017, it is apparent that it is almost impossible to meet this deadline.

With the winter session of the Parliament concluding on 16th December, 2016 the immediate probable timeline for approval of the Central Legislations can be only in January 2017 when the Budget Session of the Parliament would commence.

Considering that the States have also to pass the SGST legislation, it appears that 1st September 2017 is the probable date for rollout of GST. The constitutionally mandated deadline is 16th September, 2017.

In our view, delay is not a matter concern as it provides sufficient time to trade and industry to understand the nuances of GST and prepare effectively.

Let us hope that the GST Council decides all contentious issues early.

Date : December 11, 2016
 

GSTN - Migration of Registration GST System Portal

Here is the link to the portal for migration of registration of existing assessees of Central Excise, Service Tax and VAT.

https://www.gst.gov.in/

The process is

• Your provisional ID will come from your tax officer

• Update profile information and upload documents

Enrolment is taken up in a staggered manner. At present migration of dealers registered under the State VAT Act is facilitated.

GST registration - Enrolment Plan of States

The schedule of the enrolment activation drive for states as in GSTN website is given below.

States Start Date End Date
Puducherry, Sikkim 08/11/2016 23/11/2016
Gujrat, Maharashtra, Goa, Daman and Diu, Dadra Nagar Haveli, Chhattisgarh 14/11/2016 29/11/2016
Odisha, Jharkhand, Bihar, West Bengal, Madhya Pradesh, Assam, Tripur, Meghalaya, Nagaland, Arunachal Pradesh, Manipur, Mizoram 30/11/2016 15/12/2016
Uttar Pradesh, Jammu and Kashmir, Delhi, Chandigarh, Haryana, Punjab, Uttarakhand, Himachal Pradesh, Rajasthan 16/12/2016 31/12/2016
Kerala, Tamil Nadu, Karnataka, Telangana, Andhra Pradesh 01/01/2017 15/01/2017
Service Tax Registrants 01/01/2017 31/01/2017
Delta All Registrants (All Groups) 01/02/2017 20/03/2017

Click to download Enrolment Plan of States

State Circulars on migration of assessees to GSTN

Several States have initiated the facilitation for migration of existing assessees registered under the VAT Act of the respective States.

Click to view the State Circulars

It is requested in the portal to complete the enrolment during the specified dates. However, the window will be open till 31/01/2017 for those who miss the chance.

This portal has detailed FAQs and User Manual on Using the GST Common Portal.

Earlier GSTN had released FAQs on the procedure for Enrolment of the Existing Taxpayer on the GST System Portal.

Migration of existing assessees

Date : November 8, 2016