Centre, states spar over 3 key issues, eye April GST rollout
To
Discuss Threshold, Compensation & Jurisdiction Today
It is
likely to be a stormy Friday at Vigyan Bhawan where the Centre and the states
will tackle at least three contentious issues even as they agreed to try and
roll out goods and services tax from April.
Already ,
deciding the threshold for 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 turnover of 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 con verged 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.
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 contro versial 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 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.
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.
Sources
said that even some of the BJP states such as Gujarat want discussion on a few
issues.
(TOI)
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