GST Council is the country’s ‘first federal institution’

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Terming the Goods and Services Tax (GST) Council as the country’s “first federal institution”, Finance Minister Arun Jaitley said the indirect tax reform has become an exception to India’s Constitutional order.

“In Indian Constitution order, there were no grey areas between the Centre and the States….The powers of one doesn’t overlap the other. But concurrent powers have been given under GST to both the Centre and the States,” he said at Breakfast with BusinessLine jointly hosted by ITC Maurya.

His comments come soon after the Lok Sabha passed four enabling legislations for the indirect tax reform relating to Centre GST, Union Territory GST, Integrated GST and compensation to States. In its 13th round of meetings on Friday, the GST Council has also largely approved all nine rules for the tax and the government plans to roll it out from July 1 this year.

When asked whether industry and the government are prepared for the roll out of GST, he said that there are always questions during a period of transition.

“Some people inevitably won’t be ready. Some people who enjoy being outside the tax net will raise all kinds of question marks. Once it becomes a habit…it may take a couple of weeks or a few months before everybody fits into that space,” he said.

On multiple registration for IT, software firms, banks and insurance firms, Jaitley said that for audit, the CGST law has a section that permits carving out an industry or category of industry for a differential treatment.

Regarding the pending excise and service tax cases, he said the government would try to wind them up as “it is better to clean up the table” before the roll out of GST.

When asked if there would be an amnesty scheme for pending cases, he said “We will, provided chartered accountants also push the assesees”.

Jaitley also expressed hope that GST will lead to lesser harassment by tax authorities as it will reduce the “in person contact between the taxman and the assessee diminishes”, he said.

Similar, efforts are being made in direct taxes to ensure there is less physical contact between the tax department and the tax payer.

“In India not paying taxes was considered a way of life. It was neither considered morally nor legally hazardous,” he said, adding that if the total tax evaded is transferred to rural India, it would make a huge difference.

Read more at: http://www.thehindubusinessline.com/economy/gst-and-jaitley-at-breakfast-with-bl/article9612467.ece