Ahead of the Winter session of Parliament scheduled later next month, the Centre has called a consultation meeting with states next week to discuss various contentious issues in the proposed long-pending goods and services tax (GST), along with the draft reports on business processes on GST registration, refunds and payment.
“The meeting will discuss the progress made on various aspects of implementing the proposed new indirect tax regime from the next financial year. Finance ministry officials of states would be attending the meeting along with the Central officials,” an official source told The Indian Express.
The meeting is also likely to take up the eight-point dissent given by the Congress members of the Parliamentary Standing Committee, which had submitted its report on the Bill in May. This includes ceiling the GST rate at 18 per cent and scrapping of the additional 1 per cent levy for manufacturing states, inclusion of tobacco, electricity and alcohol in the GST structure. The government is pinning hopes on the upcoming Winter session to get the GST Bill passed. This will be the last opportunity for the government in order to roll out the new tax regime from the next fiscal.
The Constitution (122nd Amendment) Bill, 2014, is pending passage in the Rajya Sabha, where the government does not enjoy a majority. The passage of the Bill is vital for implementing the new indirect tax regime as it empowers the Centre to levy tax on goods beyond factory gate while it empowers states to charge service tax.
“The committee under the Chief Economic Advisor on arriving at a revenue-neutral rate is already seized of the issue. This will be taken up by them as well. The report on the revenue-neutral rate would be submitted soon. The meeting next week will dwell on this issue as well,” the source said.
While the government has announced the implementation of the new regime from April 1, 2016, there are doubts that the deadline would be met. For the implementation, the Bill needs a two-thirds majority in both the Houses and ratification by 50 per cent of states, a time-consuming task.
The Centre has already invited comments on the draft business processes on GST registration, GST refunds and GST payments by October 31. According to the draft report on refunds and payments, taxpayers would be provided for monthly filing of returns for business-to-business dealings through a set of eight forms for different categories of transactions. As per the proposal, the returns can be filed on a specific date of a month, like on 10th of next month for outward supplies, 15th for inward supplies and 20th in case of monthly returns.
Similarly, the joint committee on business process for GST return has suggested filing of a periodic e-return for central, state and integrated GST.
There would also be provision for filing of GST returns by non-resident tax payers including tax aggregators like Uber.