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Major Part of GST Law Gets Green Signal at Council Meet

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Barring some clauses, centre and states have agreed upon most of proposed Central GST law
The Goods and Services Tax Council on Thursday cleared a substantial part of the central legislation for the proposed tax regime, marking a significant progress towards this reform.
The thornier issue of division of tax administration between the centre and states that can possibly delay the implementation of the new tax regime will be taken up on Friday.
“A substantial part of the C-GST law barring four to five clauses where we need some more deliberations have been cleared...The council has reached broad consensus on the law,“ a government official said after the first day of the GST Council meeting, not wanting to be named.
The C-GST law refers to the central GST law, which will be complemented by state GST laws and an integrated GST law that deals with inter-state delivery of goods and services.
The government is keen to roll out the new regime from April 1, 2017, but now the deadline looks difficult. July 1, as suggested by the industry, may be more feasible.
The council has to clear drafts of C-GST, integrated GST legislation and another one for compensation for any revenue loss incurred by states on implementing the new tax regime.
The legislation is simultaneously being vetted by the law ministry and changes suggested will again be presented before the council.
These legislations will have to be cleared by parliament before the government can roll out the goods and services tax, which replaces a number of indirect central and state taxes nationwide.
The state GST law would be modelled on the central GST law and will need to be cleared by state legislatures.
TAX ADMINISTRATION
The division of tax administration between the states and the centre has emerged as a knotty issue with states such as West Bengal wanting complete control over the administration of assesses below the turnover of `1.5 crore.
The centre, on the other hand, is keen on equal division of all assesses between the two authorities to ensure single interface with any one authority in line with constitutional amendment. It has mooted the idea of crossempowerment wherein both authorities can work in tandem on key functions of audit and registration of new assesses.
The centre is of the view that while it is ready to empower state authorities, it itself cannot be disempowered based on the constitutional amendment.
Finance minister Arun Jaitley earlier said that the government had some ideas that could help resolve the issue.
The Economic Times New Delhi,23rd December 2016

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