Crucial GST Council Meeting to Determine Implementation Date and Administrative Control
The GST Council is holding a critical meeting to resolve administrative power disputes between central and state governments regarding GST registrants. Key issues include states seeking independent control over smaller taxpayers and equitable revenue sharing for larger ones, alongside finalizing the GST launch date. This decision is urgent as GST must be active by September 16, 2017, due to a constitutional mandate, with potential political implications from state elections influencing discussions. Experts anticipate progress despite potential state non-commitment.
GST Council Convenes to Address Implementation and Jurisdiction
A pivotal meeting of the GST Council is taking place to resolve ongoing disputes between the central and state governments regarding administrative authority over Goods and Services Tax registrants. Key discussion points include:
- Certain states are advocating for exclusive control over taxpayers whose annual revenue is below INR 1.5 crore.
- States are also seeking an equitable distribution of revenue (between central and state authorities) for taxpayers with an annual turnover exceeding INR 1.5 crore.
- The finalization of the Goods and Services Tax implementation date.
The determination of the GST launch date is paramount, as the tax regime must be operational by September 16, 2017, in accordance with a constitutional amendment. Failure to meet this deadline could result in the invalidation of certain existing taxes.
Expert Analysis on Meeting Dynamics
The current delays and impasses observed in recent GST Council meetings might be attributable to upcoming elections in several significant states. It is anticipated that states may exhibit reluctance in these discussions, as political parties aim to prevent GST-related decisions from influencing election outcomes. A unified approach, where taxpayers are not subject to multiple controls from both state and central authorities, is supported. Furthermore, maintaining the central levy of service tax, particularly during the initial years of GST implementation, is advisable. There is an expectation that substantial progress will emerge from today's deliberations.