The President of IRS(C&CE) officers Association has stated that they are satisfied with the arrangement because the Chairman of CBEC has been included as a non voting member of the council , wherein voting members are Ministers.

The President of IRS(C&CE) officers Association  has stated that they are satisfied with the arrangement because the Chairman of CBEC has been included as a non voting member of the council , wherein voting members are Ministers.

With the Goods and Services Tax (GST) Council slated to take vital decisions during its coming

 meets, the government on Saturday appointed Arun Goyal as Additional Secretary of the pan

 India indirect levies' apex body. Earlier Cabinet has approved that "The GST Council 

Secretariat shall be manned by officers taken on deputation from both the

central and state governments." Both Secretary and Additional Secretary

 belong to state cadre. 

According to the Appointments Committee of the Cabinet (ACC), Goyal will take charge of

 the newly created post of Additional Secretary, GST Council, under the Central Staffing Scheme.

"Arun Goyal, lAS (UT:1985) Additional Secretary, Project Monitoring Group, Cabinet Secretariat

 on lateral shift as Additional Secretary, GST Council against Newly created post under Central

 Staffing Scheme," Ministry of Personnel, Public Grievances & Pensions said in a statement.

The Council on Friday fixed the turnover-based exemption limit from such levies at Rs 20 lakh,

 but left the decision on fixing the actual tax rates and the finalisation of draft rules for later.

The council is scheduled to reconvene on September 30 and again from October 17-19.

Earlier the IRS(C&CE) Officers Association met the FM and appealed for posting of IRS officers

 in the Secretariat of GST Council, but IAS lobby advocated that since all the Commissioners

 of VAT  and  Secretaries of Finance departments of States are IAS officers, it will create 

administrative problem for the senior IAS officers  to report any non IAS officers who belong

 to an  inferior cadre.The Cabinet committee accepted the version of IAS lobby and decided to

  appoint  Arun Goyal as Additional Secretary of the pan India indirect levies' apex body. 

However the President of IRS(C&CE) has stated that they are satisfied with the arrangement

 because  the Chairman of CBEC has been included as a non voting member of  the council ,

 wherein voting members are Ministers.

Central Staff upset with Pay Hike- However they feel that the Central government should not reduce the rate of Allowances and it should be implemented with effect from 1.1.2016

It is believed that Payment of Allowances in Revised pay may at least satisfy the Government Staff, despite the fact that the Pay Hike is not sufficient.7th CPC Allowances

Staffs  are annoyed about the inordinate delay in announcing Allowances. Talks are doing rounds that the government is deliberately playing the delaying tactics to make the CG Staff to accept the decisions of Allowance Committee.Already the Central Government Staff are very much upset with Pay Hike recommended for next Ten Long years. They in fact are not happy about the Arrears paid to them. Though the Govt has defended that the Pay Revision arrears will not be as high as in previous Pay Commission, because Arrears for couple of years had been paid in previous Pay Commission. But this time Pay Revision took place within seven months from the due date. So obviously the Pay Revision Arrears will be lesser than previous Pay Commission.

Though a Committee was formed to review the Minimum Pay and Fitment Factor, it is believed that it was wrapped up already. But the federations are Optimistic. They expect somehow the Committee will help them to pacify the Govt Servants on this particular issue.

But nonpayment of Allowances in revised Pay will certainly axe the feel good factor in Central Government Offices. They are started losing patience over it and expect the government to announce it soon. Because the take home pay after pay revision is unbelievably very low comparing to the previous Pay commission. The Central government should not reduce the rate of Allowances and it should be implemented with effect from 1.1.2016

AGAIN IAS- FM assured the IRS ( C&CE) officers Association for posting of IRS officer as Additional Secretary in GST council , but IAS lobby again successfully managed to post an IAS officer as Additional Secretary.

AGAIN IAS- FM assured the IRS ( C&CE) officers Association for posting of IRS officer as Additional Secretary in GST council , but IAS lobby again successfully managed to post an IAS officer as Additional Secretary.

With the Goods and Services Tax (GST) Council slated to take vital decisions

 during its coming meets, the government on Saturday appointed Arun Goyal as

 Additional Secretary of the pan India indirect levies' apex body.

According to the Appointments Committee of the Cabinet (ACC), Goyal will take

 charge of the newly created post of Additional Secretary, GST Council, under the

 Central Staffing Scheme.

"Arun Goyal, lAS (UT:1985) Additional Secretary, Project Monitoring Group, Cabinet 

Secretariat on lateral shift as Additional Secretary, GST Council against Newly

 created post under Central Staffing Scheme," Ministry of Personnel, Public 

Grievances & Pensions said in a statement.

The Council on Friday fixed the turnover-based exemption limit from such levies

 at Rs 20 lakh, but left the decision on fixing the actual tax rates and the finalisation

 of draft rules for later.

The council is scheduled to reconvene on September 30 and again from October

 17-19.

FM assured the IRS ( C&CE) officers Association for posting of IRS officer as 

Additional Secretary in GST council , but IAS lobby again successfully 

 managed to post an  IAS officer as Additional Secretary.

GST threshold fixed at Rs 20 lakh, rate to be decided in Oct

States will have exclusive control over all dealers up to a revenue threshold of Rs 1.5 crore in a year

In a big step forward on the implementation of Goods and Services Tax, the Centre and states, reached an agreement on keeping traders with annual revenue of up to Rs 20 lakh out of the new national sales tax regime that will subsume all cesses.

There will be an exception for North-Eastern and the hill states where the limit will be Rs 10 lakh, Finance Minister Arun Jaitley said on Friday.

While the two sides, at the meeting of the GST Council, agreed on the contentious issues of revenue threshold – below which traders will be exempted from GST, and sharing of administrative powers, the all crucial GST rates will be decided in the meeting to be held on October 17-19.

Resolving issues over dual control over small traders, it decided that states will have exclusive control over all dealers up to a revenue threshold of Rs 1.5 crore in a year.

A mechanism would be worked out for traders above Rs 1.5 crore to ensure that a dealer is regulated either by the central government or the state government and not both.

Broad principles for compensating states for any loss of revenue when the new regime is rolled out from April 1, 2017 were also discussed at the two day meeting of the panel that is headed by the Union finance minister and includes representatives of all states.

On service tax, it was decided that in the absence of expertise with states, the Centre will continue to exercise control over all the 11 lakh service tax registered dealers irrespective of their revenue levels, he said.

Jaitley said the next meeting on September 30 will finalise the draft rules regarding implementation of exemptions.

While 2015-16 will be the base year for calculating revenue compensating to states for any loss of revenue arising from rollout of GST, the final methodology will be worked out in next meetings, he said.

The exemption list has also been cut down to 90 items from the current 300 goods and services. Also, the meeting decided that all cesses will be subsumed in the GST, Jaitley said.

At the end of two-day maiden meeting of the GST Council, Jaitley said it was decided that state authorities will have jurisdiction over assessees with annual turnover of less than Rs 1.5 crore.

For those with turnover of over Rs 1.5 crore, there would be cross examination either by officers from the Centre or states to avoid dual control.

At the goods and services tax (GST) council meeting all states sat down as equals with the central government to arrive at a structure for the landmark indirect tax reform. Everyone is in agreement that services tax will be collected entirely by the central government. But the tax on goods will be divided. States will collect taxes from companies with turnover of less than Rs 1.5 crore and the  centre will collect taxes from companies with more than Rs 1.5 crore. In today's edition of Indianomics, former Finance Minister Yashwant Sinha outlined the politics of GST and said that too many GST rates will lead to administrative and legal problems and added that GST should be kept  as simple as possible. Below is the verbatim transcript of Yashwant Sinha's interview to Latha Venkatesh on CNBC-TV18. Q: Let me just layout what my problem is, the GST council is the first constitutional body, where all states have one vote I mean there is equality in Rajya Sabha and Lok Sabha, the vote is based on the population of the state. Now I wanted to know how this will affect the politics of centre-state relations. For instance the Centre has 33 percent of the votes in the council. It needs 19 out of 31 states to vote along with it to get the 75 percent to just bulldoze its way. Do you think the centre will buy up some of the small states and thus just get its way on every issue? A: It does, there is no doubt about it. The idea in the GST council was not to handover complete powers to the states and the centre could not afford to be a mere bystander. Therefore, it is important for centre to retain some powers, which will enable it to put the voice of sanity in the GST council, but as far as the politics of the GST council is concerned that from my experience of working with the empowered group of state finance ministers which I had created as you will recall. My impression was though we were dealing with the state VAT that the states were more concerned with revenue loss or gain of their own state, even the political colour of the government of that state was not an issue, so we had a situation where Madhya Pradesh which was a congress government would come forward and support VAT and the other states which belonged to the BJP would oppose it. That is the way it works. This is a pure economic principle on which the debate will be based and political complexion of the government in the states I don’t think will matter very much. Q: We are getting some noises from finance ministers that they want 3 rates. Do you think that would be the way forward, what would your advice be 2 rates, 3 rates or even more? A: It is with the great deal of effort that we settle for 3 rates when I was finance minister as well as central VAT (CENVAT) was concerned, you will recall that I created a mean rate which was 16 percent, then there was a demerit rate of 24 percent and there was a merit rate of 8 percent and this is the formula on which we have worked. Now as far as the GST is concerned I personally feel that introduction too many rates will lead to confusion and will lead to administrative problems, will lead to litigation. A producer of every product will say why I am in this category and why not in the lower category and it lead to as I said administrative and legal complications, so I very strongly recommend that there should be only 3 rates. Of course, there will be an exempt list, but there should be only 3 rates except again I will say that if some of their states are pleading for threshold for presumptive tax, where you will impose 1 or 2 percent and will not go into the details and they will up to a certain turnover of let say Rs 50 lakh just deposit that rate of tax. Much will depend on discussions with the states on this, but I think its centre’s responsibility to persuade the states to accept 3 basic rates. Q: How will the tax administration pan out, today after the GST council we heard that service tax is going to be collected only by the centre, but goods tax the work is going to be shared. Will the administration be amicably divided? A: This is the most important complication in the introduction of GST. How will the tax administration work in on a combined basis, the central tax administration and the tax administration of the state, who will collect what. My suggestion will be that they should fix a threshold that up to this level the states will collect, beyond that level the centre will collect and ultimately it will be a common pool and it will be distributed to amongst the states in a manner which has already been agreed upon. Q: That is what they have agreed today but today the states could not agree on the rate of projecting the future growth of GST. Should it be the basis of the last five years, the best three of the last ten years, three median years, do you think this will be amicably resolved? A: We already have the precedent of government of India agreeing to compensate the states as far as VAT was concerned. We followed the principle of average of three years and we did not take the best or the worst. It was just the average of last three years. So you decide on a number of years over which averages will be calculated and the compensation if it becomes necessary will be paid according to that. But if you take the best years out of the last six or the worst years etc, that will create complications. Let me make one point to you, it is very important that the whole thing is kept as simple as possible otherwise we will lose the advantage of GST. Q: Let me look at it from the centre's angle. States who earn more, keep the extra money. States that lose get compensated. So centre loses anyways. A: Sure because the experience of VAT would suggest that despite the fact that the cntre promised to compensate the states for revenue loss, it didn’t amount to very much because compliance improved as a result of which the states ended up collecting more revenue than was the case in the past years. So it did not become too much of a burden for the government of India and therefore it is a destination based tax. So states, which are not destinations may tend to lose out but we will have to keep an eye on and I don’t think -- we have worked it out earlier in the case of VAT and that same formula it should apply to GST also. Q: What about agreeing on the standard rate itself? Kerala seems to be okay with 18-20 percent but when we spoke to J&K, they weren’t and they thought that the producing states will be even more obdurate. Do you think this will get resolved by November 22 and at the lower end at the 18-20 percent? A: This is a mathematical calculation. How much is the combined revenue of the centre and the states, today pre-GST and then you decide a rate or rates, which will be revenue neutral. So there will be a mean rate obviously and when we are talking of 16-18 percent, we are talking of the mean rate under which most of the commodities products will fall. Suppose you have two-three rates then you can tweak it in such a way that you make sure that if anything -- the mean rate is becoming excessive, let us say instead of 18 percent, it is becoming 20-22 percent then you transfer some of the burden to the demerit rate -- instead of 24 percent, make it 30 percent so that the overall package is revenue neutral. Q: Federal countries be it the United States or India have shown a centralising tendency, will the GST be another factor that will end up strengthening the centre at the expense of the states? A: I don’t think so. In fact, it will on the other hand militate against centralisation and work for a real federation because as we said in the beginning, the GST council has a constitutional position and the council cannot be ignored, the consensus in the council cannot be ignored and the consensus will not be torpedoed only because the centre has 33 percent. So that is a very important -- cooperative federalism will have to be on its best display in the GST council and no finance minister of India now or any finance minister of the state can take the constitutional arrangement for a right.

Click below- Chairman DO letter dated 17th September 2016 for Role of CBEC as work for GST- Tax base will be increased for collection of IGST. 50% staffs of Secretariat of GST Council will be from CBEC.

• Chairman DO letter dated 17th September 2016 for Role of CBEC as work for GST

S Ramesh, DG/systems  Appointed CBEC Member

S Ramesh was today appointed CBEC member.

  S Ramesh was today appointed as member in Central Board of Excise and Customs (CBEC).

Ramesh, a 1981 batch officer of Indian Revenue Service (Customs and Central Excise), is presently working as Director General of Systems.

It has been decided that the Centre will continue to exercise control over all the 11 lakh service tax registered dealers irrespective of their revenue levels.Hence at present there is no question of surplus of any staffs, but after 3 years the staffs of centre may be reduced drastically. At present the staffs of States will be deputed to Centre to gather knowledge on Audit. detection of evasion etc.

'Consensus at GST Council signals April 2017 cut-off feasible' A decision on contentious issues like exemption and threshold taken with consensus without voting in the first meeting of GST Council signals that the April 2017 rollout deadline is achievable, experts said. | 1 Comments A decision on contentious issues like exemption and threshold taken with consensus without voting in the first meeting of GST Council signals that the April 2017 rollout deadline is achievable, experts said. They also hailed the decision to enhance the annual turnover for exemption to Rs 20 lakh, saying it would be administratively easier for the government and several small businesses. "Overall, a good day in office for the GST council, particularly because all decisions were taken with consensus, without the need for voting," PwC India Leader Indirect Tax Pratik P Jain said. The GST Council, chaired by Union finance minister, which met for the first time, decided on keeping traders with an annual revenue of Rs 20 lakh out of the new national sales tax regime that will subsume all cesses. Resolving issues over dual control over small traders, it decided that states will have exclusive control over all dealers up to a revenue threshold of Rs 1.5 crore in a year. A mechanism will be worked out for traders above Rs 1.5 crore to ensure a dealer is regulated either by the central government or the state and not both. Deloitte Haskins & Sells LLP Senior Director M S Mani said inclusion of cesses in GST will significantly benefit all businesses and increase the available pool of credits which can be used to offset the GST liability. "The consensus on the GST threshold achieved today indicates that the date of April 2017 is very likely to be the Go Live date for GST in India," Mani said. Experts said the decision that all cesses will also be subsumed in GST provides the much-needed clarity to the industry and will allow better uniformity of taxes to businesses. BMR & Associates LLP Leader Indirect Tax Rajeev Dimri said retention of administrative control over existing service tax assessees by central authorities highlights an open mindset to facilitate smooth transition to GST. On service tax, the Council decided that in absence of expertise with states, the Centre will continue to exercise control over all the 11 lakh service tax registered dealers irrespective of their revenue levels. "This will allow some time to the state authorities to gear up administratively for taxation of services, given a short time for internal trainings and with so much else to do. The current announcement, however, only addresses part of the dual control issue," Dimri said. He, however, added that clarity is still awaited in respect of clients with mixed profile of businesses. EY India Indirect Tax National Leader Harishanker Subramaniam said the interesting point is that for GST on services, the Centre will have administrative control irrespective of threshold at least in the initial years till states are trained to handle services. "This may be a good news for the industry as many were worried as to how states will handle complexity of services. However, in my understanding, this may mean dual control for companies which have both services and goods supplies," he said.

 It has been decided that  the Centre will continue to exercise control over all the 11 lakh service tax registered dealers irrespective of their revenue levels.Hence at present there is no question of surplus of any staffs, but after 3 years the staffs of centre may be reduced drastically. At present the staffs of  States will be deputed to Centre to gather knowledge on Audit. detection of evasion etc. 

"Below Rs 1.5 crore you should not have control. (They) should not face audit by both Centre and States. We didn't want Inspector Raj,

New Delhi, Sep 23 (PTI) With the Centre and states agreeing to keep traders with turnover of up to Rs 20 lakh out of the GST ambit, interest of small traders has been protected, West Bengal Finance Minister Amit Mitra said today.

Hailing the decisions reached at the first meeting of GST Council, he said more than half of the 2.65 lakh businesses in West Bengal will not be paying the new indirect tax, set to be implemented from April 1.

"We were able to protect the interest of small traders, small manufacturers and laying out of initial path of GST," he told reporters here.

The two-day meeting of the GST Council passed rules which will be the first steps towards the Goods and Services Tax (GST), he said.

The meeting decided on a Rs 20 lakh threshold of annual turnover for levying GST on traders and businesses and Rs 10 lakh for North Eastern and hilly states.

Stating that the VAT limit currently varies from state to state, Mitra said that for West Bengal the limit is currently at Rs 10 lakh, for Uttar Pradesh it is at Rs 5 lakh and it is only Rs 1 lakh in North Eastern states.

There is wide variation among states on current VAT threshold. "GST Council agreed at Rs 20 lakh threshold which means any dealer who has turnover of less than Rs 20 lakh will not be part of tax net. This gives huge relief to small businesses of India and West Bengal," he said.

In West Bengal, a total of 1.38 lakh business will not be paying tax out of total pool of 2.65 lakh, he said.

He said the administrative cost of collecting tax is higher than the tax received. "This is a big relief."

On dual control, he said businesses with turnover of Rs 1.5 crore annually continue to be under state control and beyond that will be dual control.

"Below Rs 1.5 crore you should not have control. (They) should not face audit by both Centre and States. We didn't want Inspector Raj," he said.

At the end of two day discussion, Union Finance Minister Arun Jaitley agreed on Empowered Committee suggestion that any small manufacturer or trader would not be included in the dual control mechanism.

"Only states would be involved in working with taxpayers like small traders and shop keepers," he said adding above Rs 1.5 crore turnover businesses would be governed by dual control as Centre already levies excise duty.

"Small manufacturers will not face dual control in GST," he said. .

the power for assessment of 11 lakh service tax assessees who are currently assessed by Centre, would remain with it

The Goods and Services Tax Council, in its second day of meeting, has struck political consensus on the GST threshold limit. Finance Minister Arun Jaitley addressing the media after the meet said the threshold limit has been set at Rs 20 lakh. For North-Eastern and other small states, the limit is Rs 10 Lakh. If a trader's turnover is less than the threshold limit per annum, he won't be covered under the indirect tax reform. The Council also resolved that all cesses will be subsumed in the GST. The financial year ending March 31, 2016 will be the base year for making revenue projection. At the end of the first meeting, the Council headed by Finance Minister Arun Jaitley decided that the state authorities will have jurisdiction over assessees with annual turnover of less than Rs 1.5 crore. Those with turnover of over Rs 1.5 crore, Jaitley said there would be cross examination either by officers from the Centre or state to avoid dual control. However, the power for assessment of 11 lakh service tax assessees who are currently assessed by Centre, would remain with it. New assessees which would be added to the list would be divided between the Centre and states. While the next meeting of the Council on September 30 will finalise draft rules on granting exemptions, the GST rate and tax slabs would be decided at its three-day meeting beginning October 17.

Industry and tax experts were concerned that their demand of single control was not fully accepted.

India sets enforcement rules for GST, to decide rate next month

Finance Minister Arun Jaitley gestures as he addresses a gathering during a seminar on 'Income Declaration Scheme-2016' in Ahmedabad, India, July 10, 2016. REUTERS/Amit Dave/Files

Union and state officials have resolved key issues on enforcing a planned sales tax in India, Finance Minister Arun Jaitley said on Friday, and will meet next month to decide the main tax rate and those for different sectors.

Implementation of the long-awaited goods and services tax (GST), planned for April 2017, is expected to boost revenue through better compliance while making life simpler for businesses that now pay a host of federal and state levies.

The GST Council, comprising union and state finance ministers, agreed at its first meeting that all businesses with annual turnover of 15 million rupees  or more would be administered either by union or state tax officials, depending on risk parameters.

"All decisions have been taken without a vote," Jaitley told reporters after the two-day meeting, adding the council will meet again on Oct. 17-19 to finalise rates under the new tax law.

The issue of "dual control" had been one concern on GST, but the understanding reached on Friday made clear that one authority - either state or federal - would be responsible for assessing a company's tax liability.

Industry and tax experts were concerned that their demand of single control was not fully accepted.

'NOT GOOD NEWS'

Rajeev Dimri, a tax expert with consultancy BMR & Associates LLP, said all companies with an annual turnover of at least 15 million rupees will come under dual control.

"That is not a good news. It is not in the best interest of industry," he said.

Firms with annual turnover below 10 million rupees  in eight northeastern states and 20 million rupees in other parts of the country would be exempted from the tax, Jaitley said.

Plans to introduce a unified sales tax have gained momentum after more than half of India's state legislatures followed the federal parliament in passing the 122nd amendment to the constitution, which paves the way for the GST.

Tough bargaining on the rate and scope of the tax continues as many states want an average tax rate of 22-23 percent compared with the federal government suggestion of 18-19 percent.

Both the union and state legislatures must pass three laws setting the rate and scope of the GST before the tax comes into effect. Jaitley hopes for passage in the winter session of parliament scheduled for November.

($1 = 66.6900 rupees)

GST Council fails to arrive at consensus on exemption limit; will meet again today

Exemption limit figures of Rs 10 lakh and Rs 25 lakh are being deliberated

It will take up the issue today along with compensation to states losing The GST Council, which met for the first time on Thursday, failed to arrive at a consensus on the contentious issue of exemption threshold for applicability of the new unified indirect tax – goods and services tax (GST). The meeting, which was chaired by Union finance minister Arun Jaitley, will meet again today to come to a consensus on exemption limit under GST.

Jaitley said the two other agenda that will be taken up today would be compensation to states that are expected lose revenue on account of the new levy and provision for cross empowerment or dual control between the Centre and states for smooth administrative purpose. 

The minister said exemption limit figures of Rs 10 lakh and Rs 25 lakh had emerged during the meeting but there was no unanimity on one number.

States like Uttar Pradesh (UP), Tamil Nadu, West Bengal and others, which would lose substantial amount of revenues if the cut-off limit was fixed at Rs 25 lakh, were insistent on a threshold of Rs10 lakh while those states which did not earn much in that band were agreeable with a higher cap.

Kerala finance minister Thomas Isaac said North-eastern states, where 80-90% of traders have annual turnover of below Rs 25 lakh have been exempted.

"For Northeastern states 80-90% of traders would be below Rs25 lakh annual turnover. They will be exempted, that consensus has already been reached. The issue is with respect to big states like UP (7.8%), West Bengal, Tamil Nadu and others, which were insistent that it should be Rs 10 lakh," he said.

The compounding limit suggested for exemption was Rs 50 lakh, which would be allowed to only traders, keeping services and manufacture out.

Isaac, who participated in the meeting, said Tamil Nadu wanted voting rights proportionate to either the population or the GDP of a state. This, he said, was opposed by many states.

Talking to the press after the meeting, Jaitley said the Council members had agreed upon two agendas. One was rules of conduct and business and other was schedule for GST, keeping April 1, 2017 as the deadline for its rollout.

"We have finalised the draft rule with regard to functioning of the Council. To resolve all outstanding issues, a draft timetable was given which also has been adopted," he said.

The FM said the Central GST (CGST) and integrated GST (iGST) and state GST (SGST) will be passed by the Central Parliament and state legislatures in the winter session.

"Starting from September 22, we have roughly estimated that we have two months till the November 22 to resolve all outstanding issues," he said.

Isaac said the two issues which would be seriously considered today would be the base year for the computation of compensation and dual control for collection of taxes.

He said suggestions given by states on what should be the base year was the average of the best three years of the last six years. The government was looking at a base year, which was the last financial year. For VAT, the government had taken the best three years of the last five years.

"We are arguing that it (base year) should be the average of the best three years of last six years. This is a serious issue that will be debated tomorrow," he said.

GST Council consensus emerging on April 1, 2017 rollout, Rs 25 lakh threshold

As the Goods and Services Tax (GST) Council comprising the Centre and states met here on Thursday — its first session after it was formed last week — a consensus seemed to emerge among the members to usher in the new tax from April 1, 2017.

As the Goods and Services Tax (GST) Council comprising the Centre and states met here on Thursday — its first session after it was formed last week — a consensus seemed to emerge among the members to usher in the new tax from April 1, 2017. They have also resolved to fix the upper limit of aggregate turnover for taxpayers to opt for the hassle-free composition scheme at Rs 50 lakh, but restricted the facility to traders. The council was also veering towards fixing the turnover threshold for a business to be under the GST ambit at Rs 25 lakh, although some smaller states pitched for an exemption level of R10 lakh. While the members were still squabbling over states’ demand for exclusive right to tax businesses below Rs 1.5 crore in sales, the idea of a moderate standard rate was clearly gaining acceptance among them, though it was not formally discussed, sources said.

Stating that Thursday’s meeting was held “by and large in true federal spirit” with no clear division on political lines, finance minister Arun Jaitley said the council endorsed the draft rules for its functioning. A draft law outlining the methodology for compensating states for any revenue loss in the GST regime would be discussed by the council on Friday, along with the provision of empowerment (dual control), he said.

Jaitley said the council would meet in quick succession over the next few weeks (the dates for the next session will be finalised on Friday) to decide on other issues including the rates. Sources said a three-rate structure seemed to be favoured by the Centre and most states at this juncture.

The composition scheme allows a registered trader to pay tax at a fixed rate (likely 1%) on turnover and avoid any further scrutiny by the taxman, as far as local (intrastate) sales are concerned. Those who opt for the scheme, however, would not be eligible for input tax credit, a reason why not all manufacturers and service providers might not find it attractive.

A committee headed by chief economic adviser Arvind Subramanian had recommended a standard GST rate of 17-19% and said that a low rate and technology would help boost compliance and protect the revenue interests of the the Centre and states, without pinching industry and consumers.

Kerala finance minister Thomas Isaac suggested that the rate for “essential” (merit) goods be much lower than the 12% recommended by the Subramanian panel, probably, even 4%. He said if the rate on gold is increased to 4% or so from 1-1.6% (Centre plus states) now and many consumer durables that can be classified as luxury (demerit) items are taxed at 22-24%, the standard rate could be brought down. The Subramanian panel, which recommended a revenue-neutral rate of 15-15.5% and a standard rate of 17-19%, had proposed a high rate of 40% for a clutch of demerit non-GST (excise) goods like luxury cars, aerated beverages, paan masala, etc, but Isaac is pitching for a much longer list of demerit goods.

In the powerful GST Council, the Centre and states will have voting strength in a 1:2 ratio; the council’s decisions will require support of three-fourth of the members, meaning neither the Centre nor states can do without the other.

The council, headed by the Union finance minister, will have to thrash out many contentious issues expeditiously so that the April 1, 2017, deadline for the GST’s introduction could be met. Apart from the rates and the tax’s applicability thresholds, the items on the agenda of the council include the exemption list, place of supply rules and the mechanism for compensating states for any revenue loss. Sources said a final decision on rates or the list of exempt items was unlikely in the ongoing two-day meeting, but a view was likely to be taken on the threshold of applicability of tax.

While the GST council vice-chairman could be elected by consensus or by ballot, some states are peeved at the “bureaucratic” circular issued by the Centre in this regard. On its part, the Centre is on the fast track in completing the formalities for introducing GST — while the several sections of the Constitutional Amendment (approved by President Pranab Mukherjee recently) have already been notified, a model GST law is under the consideration of states and the IT network (GSTN) for the new regime is being put in place.

Centre, states spar over 3 key issues, eye April GST rollout

New Delhi: It is likely to be a stormy Friday at Vigyan Bhawan where the Centre and the stateswill tackle at least three contentious issues even as they agreed to try and roll out goods and services tax from April.

Already, deciding the thresholdfor imposing GST is proving to be a tough task, given that states such as Uttar Pradesh, Tamil Nadu and those from the North East believe that keeping units with a turnoverof under Rs 25 lakh outside the cap will result in massive revenue loss. For the north eastern states, this threshold would mean that 80-85% of the units would be out of the tax net. Uttar Pradesh, which said that around 8% of the units would go out of the net, also argued for keeping the threshold at Rs 10 lakh.

"With regard to composition (scheme) we have finalised our proposal which has been unanimously accepted by the members. With regard to threshold for exemptions, there are two sets of suggestions which have come. We have converged those two different views... we will continue the meeting tomorrow and thereafter, so that we are able to converge to one particular figure as far as the exemptions are concerned," finance minister Arun Jaitley told reporters. The minister said that several issues such as the the timetable for rollout was agreed upon in the first meeting of GST Council on Thursday.

We recommend this Video for you

ADSPARC PTY LTD

Recommended By Colombia

Revenue secretary Hasmukh Adhia said a consensus on compounding or composition scheme was reached which decided that traders with gross turnover of up to Rs 50 lakh will pay 1-2% tax. The scheme provides for an easier method of calculating the tax liability by allowing option for GST registration for dealers with turnover below the cut-off to opt for compounding and avoid the "normal track", which comes with more paperwork.

While the other two controversial issues — the compensation formula and the demand for state control over units with turnover are yet to be decided — will be discussed on Friday, state finance ministers indicated that there was a wide gap in the Centre and the states' stand. For instance, the finance ministry has proposed that the average revenue growth for the previous three years be taken to calculate the compensation formula. Ministers from Kerala and Tamil Nadu suggested that this may not be the best option and instead want the average for the best three out the last six years to be taken to calculate the average growth. This will result in the possibility of the Centre having to shell out higher compensation, something that it is not keen on, after promising to cover losses of the states for the first five years. A minister said a similar formula was adopted to pay compensation when state VAT was introduced over a decade ago.

On the issue of cross-empowerment, several states led by West Bengal want that units with turnover of up to Rs 1.5 crore to be under the exclusive domain of states for audit and collection purposes. Again, this is not acceptable to the Centre, which has argued that around 90% of the units in this segment would be service-based entities and the states are not equipped to tackle it. Besides, it has said that it would not be able to monitor these units.

Sources said that even some of the BJP states such as Gujarat want discussion on a few issues.

Framing of Inter Commissionerate Tranfer (ICT) in pursuance of order of Hon'ble CAT, Ernakulam Bench-reg.

22-09-2016	Framing of Inter Commissionerate Tranfer (ICT) in pursuance of order of Hon'ble CAT, Ernakulam Bench-reg.
01-09-2016	Status of cost recovery charges to be deposited by custodians in customs facilities       Annexure-A   |    Annexure-B

Current Circulars / Instructions

Show   10  15  25  100   results  

Circulars / Instructions Search: 

Date of Uploading	Brief Description
04-05-2016	70th Fellowship Programme of the World Customs organization Board office circular   |   Administrative provisions   |   Objectives and Work   |   Nomination Form
15-02-2016	Action Taken by the govt. on the observations/recommendations contained in their 20th Report of the PAC on Non-compliance by the Ministries/ Deptt.

GST Council to meet regularly until fixing rate, says Jaitley

NEW DELHI: Sep 23, 2016, 

Keeping the April 1, 2017 deadline in mind, the GST Council on Thursday decided to meet regularly to resolve issues related to rate setting, threshold and exemption before the start of the Winter session, when supporting GST laws are ready to be passed.

Finance Minister Arun Jaitley, who chaired the first meeting of newly constituted council, said the body will meet in quick succession until the fixation of GST rate and other issues are resolved. He hoped there will be consensus on all issues soon.

Jaitley said the Central GST and Integrated GST bills too have to be passed by Parliament in the Winter session for the GST Act to be rolled out from April 1, next year. States simultaneously have to pass State GST laws by their Assemblies.

“All I can say is that by and large, the meeting (of the GST Council) was conducted in a true federal spirit without any form of division on political lines,” Jaitley said, however, he added that there were concerns among states about certain genuine problems regarding rate structure and exemption.

Certain states demanded lowering of threshold limit to Rs 10 lakh for imposing GST, but a majority of them have asked for Rs 25 lakh.

The council is meeting again on Friday to decide on compensation laws and cross empowerment of states, the finance minister said.

To get the two GST legislations passed by Parliament for its roll out in April, next year, the government may also advance the Winter session to mid-November from the usual third week of November, sources said.

*Finance Minister expects that there will be consensus on all issues soon
*The Central GST and Integrated GST bills too have to be passed by Parliament in the   Winter session
*All states will have to simultaneously pass State GST laws by their respective  Assemblies
*Council on Friday will decide on compensation laws

GST MEETING -HELD ON 22.09.16

Moving towards rolling out GST from April 1, Centre and states agreed on Thursday on a timetable for deciding on the tax rate and completion of legislative work but differences remained on the turnover limit for exemption from the new tax. The first meeting of the newly constituted GST Council saw states like Tamil Nadu and Uttar Pradesh demanding a larger say than one-state-one-vote principle that puts a smaller state on equal footing with a large manufacturing one.

While their demand was overruled, consensus also eluded first day of the meeting over the issue of exemption to dealers from the Goods and Services Tax (GST). While some states demanded traders with turnover of Rs 10 lakh or less be exempted, a large number, including Delhi, were in favour of the limit being fixed at Rs 25 lakh in a year. With tax collected from traders being just 2% of the total tax collection, majority view was in favour of a higher exemption limit.The GST Council, which is headed by Union Finance Minister Arun Jaitley and includes representatives of all the 29 states and 2 union territories, will continue on Friday. At the meeting draft rules regarding GST were circulated and threshold for exemption and compensation norm discussed. Clarity on base year for compensating states for loss of revenue following implementation of GST, which is to subsume an array of central and state levies including excise, service tax and VAT, will be deliberated further on Friday.

Briefing reporters, Jaitley said that the timetable has been set keeping the April 1, 2017, deadline in mind. "The target also involves the passage of CGST and IGST law at the central Parliament and then by the state legislatures the state GST law in the winter session itself. "Today, starting from September 22, we roughly have two months time till November 22 to resolve all outstanding issues and therefore a draft timetable was given which also have been adopted," Jaitley said.

The GST Council meeting, which will continue on Friday, will discuss on the compensation formula and with regard to the provision for cross empowerment, he said. "With regard to composition we have finalised our proposal which has been unanimously accepted by the members. With regard to threshold for exemptions, there are two sets of suggestions which have come. We have converged to those two different views and both on officers and ministers track we will continue the meeting tomorrow and thereafter so that we are able to converge to one particular figure as far as the exemptions are concerned," Jaitley said.

Also, doubts were cast over West Bengal Finance Minister Amit Mitra being appointed vice chairman of the GST Council in absence of the state approving the Constitution Amendment Bill. To get that chair and for any member to be eligible to vote on issues before the Council, their respective states have to clear the Constitution Amendment Bill on GST.

A consensus on compounding or composition scheme was arrived at the GST Council meeting on Thursday which decided that traders with gross turnover cut-off of Rs 50 lakh will pay 1-2% tax, Revenue Secretary Hasmukh Adhia said. The composition scheme provides for a easier method of calculating tax liability and it allows option for GST registration for dealers with turnover below the compounding cut-off. The scheme has been introduced in the Goods and Services Tax (GST) regime to reduce the administration cost associated with collection of tax from small traders. Accordingly businesses below a turnover of Rs 50 lakh can pay taxes at a defined floor rate of 1-2%, which will be much lower than the GST rate.

The Council in its subsequent meetings would take up the issue of GST rate.