It will be a race against time for GST rollout

In What’s Happening in Retail by Elargirindia0 Comments

Passage of the GST bill looks near certain, but experts say meeting the April 1 target may be tough. It will require synchronising with govts of different hues and with varying degrees of enthusiasm for the legislation. Tax experts are talking of GST kicking in midway into the 2017-18 financial year


NEW DELHI: The passage of the Constitution amendment Bill now looks near certain, but the rollout of the landmark tax reforms remain a steep climb, requiring a painstaking grind by the Centre and states.

With around 240 days to go and several other legislative steps as well as and other loose ends to tie, experts say meeting the April 1 target may be tough -something that official sources don’t rule out.

The expected parliamentary nod for the Constitution amendment aimed at improving ease of business and getting rid of multiple taxes will be a big step considering the stalemate over the past 15 months. But this marks just the beginning of a legislative marathon that needs half the states to ratify the legislation. The task will require synchronising with varying degrees of enthusiasm for the legislation -a daunting task by any standard. However, it looks even more formidable, considering that the job will not be complete until three other legislations have been passed by the Centre and states.

Government sources were non-committal about the April deadline, saying while the , the date is not cast in stone. The tax reforms can kick in by June or even a little later without creating much problems, they said.

The Constitutional amendment scheduled for discussion and voting in Rajya Sabha on Wednesday will need to be cleared by Lok Sabha to include the changes moved by finance minister Arun Jaitley in the light of consultations with states and political deliberations with Congress.
Then, the Centre also has to introduce the India and Central GST bills, something it expects to do in the winter session of Parliament. Separately, states have to enact their own laws. The silver lining is the consensus among them to roll out GST.

Tax experts are talking of GST kicking in midway into the 2017-18 financial year, something that the government may not be averse too although it is sticking to the April 1 launch date. “Rolling out GST from April will be an uphill task,” said a consultant.

Only after the Constitution is amended that the GST Council, conceived as apex decisionmaking and dispute resolution body , can be set up. This will, however, need the passage of the legislation g slated for the t winter session. t The finance ministry and the state ministers will then have to decide on the nitty-gritty such as the rates and the list of exempted goods. There are other contentious areas such as the turnover threshold for audit only by states. West Bengal, for instance, is insisting on keeping units with a revenue of over Rs 1.5 crore to be brought under dual audit, arguing that beauty parlours or small-scale units would be burdened by compliance costs.

There are missing links in the model GST law that has been circulated for comments, such as treatment of goods imported into the country that are re-exported, and the tax regime for special economic zones.

Between all this, the backbone for the implementation of the new tax regime has to be built. While the Centre, along with the states and leading financial institutions have set up a not-for-profit company , GST Network (GSTN), the software is being developed by Infosys.

Click Here for Original Source – Economic Times

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