GST implementation in a 'Nowhere to go, nowhere to run' situation

India Infoline News Service | Mumbai | January 04, 2017 19:01 IST

GST implementation may get postponed from the pre-decided date of April 1, 2017, as the GST council and states are not coming to any consensus on the terms decided by the council.

GST implementation may get postponed from the pre-decided date of April 1, 2017, as the GST council and states are not coming to any consensus on the terms decided by the council.

Undecided issues on Wednesday have been forwarded to the legal assessment department by the GST council and will be discussed again on January 16, 2016.

This issue was settled earlier, but still some states feel that the proposed fund of Rs 55000 crore is insufficient.

Many states have alleged the demonetisation drive for increased revenue loss. The states further asked the centre for more compensation in GST council meet.

There are four different tax brackets fixed by the GST council. Highest bracket is 28%. GST draft does not clarify on the issue of states' and centre’s share in the tax revenue. It is currently assumed to be 50:50. States want 60% share in the tax collection.The centre has not so far responded to this issue.



Integrated Goods and Services Tax (IGST) is under the control of the centre. It has authority to assign, levy and collect the IGST. States want their participation in IGST in terms of dual control.

Issues like tax levied on terrestrial waters were also discussed in today’s council meeting. India has a long coastal region and many states by the sea-side can get revenue from the tourism and the fishing industry. If the taxes levied on terrestrial waters go in the pockets of the centre, then states may be left with a huge fiscal deficit.
 

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