Fixing the GST rate, deciding on exempt items and ensuring no dual control by the Centre and states are among the seven key challenges which have to be overcome before GST can be rolled out by April 1, 2017, a top Finance Ministry official said Thursday.
Revenue Secretary Hasmukh Adhia listed seven challenges which need to be dealt with for smooth implementation of the Goods and Services Tax (GST).
These challenges include: calculation of revenue base of Centre and states and compensation requirements, structure of GST rates, list of exemptions, forming of consensus on Model GST Bill, threshold limits, compounding limits and cross empowerment to mitigate ill-effects of dual control.
He further said the GST Council will decide on to what extent the GST rate can be brought down from the present combined excise tax rate.
As regards the compensation which needs to be paid by the Centre to the states, Adhia said the amount can only be quantified after the GST rate is decided.
He said consultations are on with regard to the threshold limit of imposition of GST. While some states want the threshold to be Rs 10 lakh, the Centre wants it to be pegged at Rs 25 lakh.
Elaborating on the aspect of dual control, Adhia said there cannot be a situation where one trader receives notice from both the Centre and a state.
So whatever cases would be picked up for scrutiny, the Centre and state would have the power to scrutinise both SGST and CGST filings, respectively.
With regard to keeping businesses with turnover of Rs 1.5 crore out of CGST ambit, Adhia said a final call will be taken by the GST council.
The Rajya Sabha last night cleared the long pending GST Constitutional Amendment Bill and it has to now go back to the Lok Sabha for ratification.
Once the Constitution Amendment Bill is approved by Parliament and 50 per cent of state legislatures, the GST Council will have to work out the model GST bills which will provide operational details of the new tax regime.
The Council will have to work out an acceptable threshold limit for levying the GST.
GST, which is expected to be implemented from April 1, 2017, will subsume excise, service tax and other local levies including VAT, octroi.
As many as 60,000 revenue officials of central and state governments will be trained on GST laws and IT infrastructure framework to prepare them for rollout of the new indirect tax regime by April 2017.
As per the detailed Goods and Services Tax (GST) rollout road map prepared by Revenue Secretary Hasmukh Adhia, the IT infrastructure framework will be ready by March 2017 and a massive outreach and industry sensitisation programme will also be carried out.
After the training on GST laws gets complete by December 2016, GSTN will train them on the related IT infrastructure by March 2017.
Goods and Services Tax Network (GSTN) is a non-government company set up by the Centre and states to provide shared IT framework and services to central and state governments, tax payers and other stakeholders.
The revenue department has already started stakeholder consultation with the industry in Hyderabad and Jaipur.
The IT network of the Central Board of Excise and Customs (CBEC), banks, RBI, state accounting authorities and states will be ready by December-end 2016, according to the road map and the testing and integration of the IT backbone of all stakeholders is slated for January-March 2017.
To make life easier in the new regime, the Revenue Department has said no fresh registration will be needed for the existing dealers. Existing VAT/service tax/central excise dealer data are to migrate to the GST architecture.
As for new dealers, a single application will be filed online and registration will be granted within three days.
On GST returns, only one filing will be required for both the Centre and state governments.
Average tax payers will be using only four forms for filing returns — supplies, return for purchases, monthly and annual returns.
While supplies return will be filed on the 10th of every month incorporating the list of suppliers, the same data will be incorporated in the purchase return which will have to be filed on 15th of every month.
These data will be then get populated in the monthly and annual returns and the assessee will just have to sign and send it to the tax department, Adhia said.
Small taxpayers who have opted for a composition scheme will have to file return on a quarterly basis.