Chanakya IAS Academy Blog


GST stalemate resolved rollout deferred to July 1:

GST council arrived at a consensus on some contentious issues. Though the rollout has been deferred for April 1 2017.

The issues on which the council arrived at a consensus includes:

  • As per the formula of dual control. For firms with annual turnover of 1.5 crores or less 90 percent of those will be assessed by the administrative machinery of the states and rest by the administrative machinery of the center. For firms with turnover of 1.5 crore and above assessment will be in the ratio 50:50.
  • Another area of contention between the Centre and the States is the issue as to who would collect tax on economic activities that are taking place in Indian territorial waters. States will be empowered to collect taxes on any such economic activity.
  • While the power to levy, and collect the Interstate GST will lie with the Union government, a special provision in the law willcross-empower the States. This is important as there might arise contentious issues between conflicting States.
  • The rationale behind a deferred rollout is since it is a transactional tax it can be introduced anytime.

The council will meet next to approve a legislation in this regard, which is expected to be ratified in budget session of parliament.

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