GST Council agrees on five areas; set to meet again this month
The Dollar Business Bureau
The centre and the states Governments on Friday disagreed on goods and service tax (GST) council’s decisions on service tax assessment. They, however, struck a common objective on area-based exemption in the new tax structure.
Finance Minister Arun Jaitley on Friday headed the second meeting of the GST council, which gave its consent on five subordinate legislations, including registration, invoicing and exemption as part of the new GST regime.
Currently, the central government gives excise duty exemption to 11 states mainly in the northeast and hilly regions. Many states also give the same exemptions as incentives for setting up an industry.
The council decided that under GST, taxes will be collected and reimbursed from the annual budgets to the exempted categories.
The council had held a meeting last week, in which two states disagreed on certain issues, particularly on the centre taking up the assessment of 11 lakh service tax filers in the new dispensation.
“The first item has to be approval of minutes of the last meeting. With regard to one item recorded in the minutes, the service tax assessments in the new dispensation, there was a long discussion on the interpretation on the decision taken in the last meeting and that discussion consumed a lot of time today (Friday),” Jaitely told reporters.
The council will hold another meeting on October 18-20 to discuss the inconclusive issues. It will discuss service tax assessment and formulas for calculating compensation to be paid to states, in case of revenue shortfall as a result of GST implementation, projected from 1 April 2017.
The meeting will also decide on the all important GST rate. The government is looking at November 22 to complete work on deciding tax rate, draft legislation and exemptions by the council.
“Once the act is passed by Parliament or by the state legislatures as the case may be, we want the draft rules to be ready so that the rules can be notified immediately,” Jaitely said.