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  • GST Counsel - Business Line

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    debnathsuman49
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    The document discusses the potential delay in implementing the Goods and Services Tax (GST) in India due to political disputes over demonetization. Specifically: 1) The disputes in Parliament over demonetization may lead to a six month delay in fully implementing GST by April 2017 unless both ruling and opposition parties resolve their differences. 2) One key issue is "dual control" where both the central and state governments would tax goods and services, potentially resulting in double inspections of businesses which could increase red tape and harassment of companies. 3) Both levels of government need to overcome bitterness over demonetization and resolve disputes to realize the larger benefits of simplifying taxation through GST.

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    GST Counsel _ Business Line

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    The document discusses the potential delay in implementing the Goods and Services Tax (GST) in India due to political disputes over demonetization. Specifically: 1) The disputes in Parliament over demonetization may lead to a six month delay in fully implementing GST by April 2017 unless both ruling and opposition parties resolve their differences. 2) One key issue is "dual control" where both the central and state governments would tax goods and services, potentially resulting in double inspections of businesses which could increase red tape and harassment of companies. 3) Both levels of government need to overcome bitterness over demonetization and resolve disputes to realize the larger benefits of simplifying taxation through GST.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    19 views1 page

    GST Counsel - Business Line

    Uploaded by

    debnathsuman49
    The document discusses the potential delay in implementing the Goods and Services Tax (GST) in India due to political disputes over demonetization. Specifically: 1) The disputes in Parliament over demonetization may lead to a six month delay in fully implementing GST by April 2017 unless both ruling and opposition parties resolve their differences. 2) One key issue is "dual control" where both the central and state governments would tax goods and services, potentially resulting in double inspections of businesses which could increase red tape and harassment of companies. 3) Both levels of government need to overcome bitterness over demonetization and resolve disputes to realize the larger benefits of simplifying taxation through GST.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 1

    12/12/2016

    GSTcounsel|BusinessLine

    GSTcounsel
    Afterhavinggonesofar,GSTshouldnotfallvictimtopoliticalfootball

    ItseemsthatthefracasinParliamentoverdemonetisationwillimpedetherollout,oratanyratethecompletionofall
    thelegalrequirements,byApril2017.Asixmonths'delayisdefinitelyonthecards,unlessboththerulingpartyandthe
    Oppositiongettheiracttogether.Thisisindeedapity.Thisyearstandsoutfortheprogressmadewithrespecttothe
    movementtowardsatrulytransformativetaxregime.Parliamentpassedthe122ndConstitutionalAmendmentearlier
    thisyear,allowingtheStatesandCentretocrisscrossintoeachother'staxdomainswithrespecttogoodsandservices.
    Aboutamonthago,theGSTCouncilcameoutwithamultitierformulaofratesnil,5percent,12percent,18per
    cent,28percentandapunitiveratefor'sin'goods.Now,theimpasseisover'dualcontrol'inotherwords,ifboththe
    CentreandtheStatesaretotaxgoodsandservices,areassesseestobe'inspected'byboth?Atpresent,ithasbeen
    agreedthatgoodsandservicesbelowaturnoverofRs1.5crorewillbeadministeredonlybytheStates,withjoint
    controlapplyingtoenterprisesabovethislimit.However,dualcontrolonthegroundwhichwilltranslateintotwo
    setsofinspectorsnoopingaroundanassessee'senterpriseisabadidea.Itsmacksofareturntoinspectorrajof
    bonafidebusinessesbeingharassed.Thisisprofoundlyironic,giventhatGSTisaboutsimplifyingtaxrulesandmaking
    thingseasierforbusinesses.Indeed,withasimplesetofrates,thereshouldnolongerscopeforconfusionorambiguity
    overwhatrateoughttoapplytoaproductorservice.TheadministrationofGSTshouldrequireasmallertaxforceon
    thisaccount.
    ThisperhapsexplainswhythetaxdepartmentsofboththeStatesandtheCentreareactuallyagitatingagainstgiving
    uptheirexistingdomains,andhencethediscretionarypowersthattheyhavegrownaccustomedto.Both,theCentre
    andStatesshouldovercometheimmensebitternessoverdemonetisationandsetthisghostofdualcontroltorest.West
    BengalFinanceMinisterAmitMitra,withhisentrepreneurialbackground,shouldtaketheleadindemarcatingthe
    respectivejurisdictionsofthetaxdepartments.Hehasraisedconcernsoverthesuddenballooningofthetaxbasewith
    respecttoservices,from1.1millioninearlierCouncildiscussionstoover3million.Ratherthaninsinuatethatthe
    Centrewantstoholdontoadministeringservices,theStatefinanceministersshouldworkoutthematterinan
    amicablespirit,withoutbeingswayedbypowerfulvestedinterestsinthetaxbureaucracy.Thelargergoalofridding
    Indiaoflabyrinthineredtapeinourtaxationlawsshouldnotbelostsightof,especiallyafterhavinggonesofar.
    However,theonusforcreatingaspiritofconsensusalsolieswiththeCentre.ThePrimeMinistershouldshowtheway
    inbreakingtheimpasse,sothatthelargergainstobehadwithrespecttoGSTarerealisedattheearliest.
    (ThisarticlewaspublishedonDecember12,2016)

    http://www.thehindubusinessline.com/opinion/editorial/gstcouncil/article9423845.ece?css=print

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