The Goods and Service Tax (GST) council which has to decide the tax rate, exempted goods and the threshold under the new taxation regime, is all set to meet for the first time on September 22. The two-day meet of the GST Council will be chaired by the Union Finance Minister Arun Jaitley and will have Minister of State in charge of revenue and state finance ministers as members.
The GST Council is likely to iron out issues between the Centre and states for moving on fast track to roll out GST from April 1, 2017. It will also take up the discussion on issues of dual control and threshold with states demanding that they be given the legal and administrative power for imposing tax on entities with turnover of up to Rs 1.5 crore. The Centre has proposed that small traders having annual turnover of up to 20 to 25 lakh rupees, could be exempted from the GST, but states have demanded that the limit be kept at Rs.10 lakh and they have made it clear that small businesses with turnover of Rs 1.5 crore and below should be taxed only in the hands of state. The meeting is also likely to select a Vice Chairman for the Council who would be one of the state finance ministers.
The GST Council is likely to work out a consensus on all the key issues, including GST rate, within two months so that those can be incorporated in the CGST and IGST laws. Recently, Prime Minister Narendra Modi had directed that all steps including preparation of Model GST laws and rules, establishment of IT infrastructure for both Centre and states, training of officers of central and state governments must be completed before the government’s deadline of April 1.
GST, which is considered as the biggest tax reform since Independence, will subsume excise and service tax, and various other local levies including VAT and octroi. The bill was unanimously passed by the Parliament last month and over 18 states have ratified the bill.