Goods and Services Tax rollout deferred to 1 July 2017
Goods and Services Tax (GST) is a single tax on the supply of goods and services, right from the manufacturer to the consumer.
The Goods and Services Tax (GST) Council on 16 January 2017 decided to rollout the nationwide GST on 1 July 2017. The decision was taken at the 9th meeting of the council held in New Delhi.
The meeting was attended by the Chairperson of the GST Council and the Union Finance Minister Arun Jaitley and finance ministers of States.
Outcomes of the GST Council meeting
• The GST Council agreed to defer the implementation of the GST by three months to 1 July 2017. The scheduled date for the rollout of the tax was 1 April 2017.
• The bills related to the GST rollout will be discussed by the GST Council at its next meeting on 18 February 2017.
• After the approval of the GST Council, the bills will be introduced in the Parliament and State legislatures.
• The Union Government agreed to the States’ demand of horizontal split with regard to taxpayers.
• States will have powers to assess and administer 90% of taxpayers with less than Rs 1.5 crore annual turnover. The rest of the taxpayers will be under the Union Government’s purview.
• States and the Union Government will control and administer the taxpayers with more than Rs 1.5 crore annual turnover in 50:50 ratio.
• States will have the power to levy tax on economic activity within the 12 nautical miles of territorial waters. This decision is very significant because the territorial waters are under the control of the Union Government.
About GST Council
• President Pranab Mukherjee gave his assent to the Constitution (One Hundred and First Amendment) Act, 2016 in September 2016.
• The Act, amended various provisions of the constitution paving way for the introduction of the Goods and Services Tax (GST) across the country.
• As per Article 279A (1) of the amended Constitution, the GST Council has to be constituted by the President within 60 days of the commencement of Article 279A.
• Consequently, a notification was issued on 10 September 2016 regarding the formation of the GST Council.
• The Council is the apex body that takes decisions on all important decisions related to the GST, including items and rates.
• The Union Finance Minister is the Chairperson of the council.
• The Union Minister of State, in-charge of the Revenue in the Finance Ministry, and the Minister in-charge of finance or taxation or any other Minister nominated by each State Government are the members of the council.