Trust Bloomberg Tax for the international news and analysis to navigate the complex tax treaty networks and global business regulations.
By Siri Bulusu
The Indian government has deferred implementation of the goods and services tax to July 1 after resolving the hotly debated issue of dual control over taxpayers between the country’s central and federal tax authorities.
The issue of administrative control over taxpayers resulted in the continued postponement of the pan-India tax, which was originally set for an April 1 implementation date.
“The decision on deferment of GST to July is pragmatic,” Rajeev Dimri, leader of Indirect Tax at BMR & Associates LLP, said in a statement Jan 16.
“A well thought through implementation post meticulous discussion on the draft legislation is far more desirable than a premature rushed through roll out.”
Dimri said the postponement of the implementation date was necessary for the GST Council to approve the GST draft laws.
“All services, traders and manufacturers will now fall under the concurrent jurisdiction of center and state,” Dimri told Bloomberg BNA Jan. 17, an undesirable situation for the industry due to concerns over differing perspective from “two masters.”
Under the newly announced administrative control plan, taxpayers who fall above the 15 million rupee ($220,727.25) threshold will be assessed 50-50 between the federal and state authorities.
Administrative control over large companies was the primary debate between the center and state governments. According to Dimri, the 15 million rupee threshold is a carry-over from existing excise tax law—a benchmark the states used to draw a line between small and big companies.
“Small companies already don’t pay excise tax, they only pay VAT, so the states wanted to keep control over those taxpayers,” Dimri said.
Ninety percent of taxpayers who fall below a threshold of 15 million rupees will be assessed by state tax authorities with the remaining 10 percent being assessed by the federal tax authorities.
States will also collect tax on economic activity within 12 nautical miles of territorial waters.
The GST Council will meet again Feb. 18 to finalize the GST draft laws, before it is presented before parliament and state legislatures for approval.
The three GST bills awaiting approval by parliament are:
To contact the reporter on this story: Siri Bulusu in New Delhi at firstname.lastname@example.org
To contact the editor responsible for this story: Penny Sukhraj at email@example.com
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)