GST Updates (01 Nov 2016)


GST rates: Amit Mitra blames Centre for concealing service tax payer data

Tue, Nov 01 2016.
In a letter to Arun Jaitley, West Bengal finance minister Amit Mitra blames the Centre for concealing the existing service tax payer base from the states
The sharing of administrative powers between the Centre and the states for controlling traders and service tax payers in a GST regime has been a point of contention between both for a long time.
New Delhi: In another signal of the growing trust deficit between the states and the Centre, West Bengal finance minister Amit Mitra has blamed the Centre for concealing the existing service tax payer base from the states.
The sharing of administrative powers between the Centre and the states for controlling traders and service tax payers in a goods and services tax (GST) regime has been a point of contention between both for a long time. Many methods of sharing these powers have been proposed and discarded over the last few weeks in the meetings of the GST council.
In a letter to Union finance minister Arun Jaitley ahead of the crucial GST council meet on 3-4 November, Mitra wrote that he was surprised about the data provided about tax payer base in services provided by the GST council secretariat.
“The minutes of the 1st and the 2nd GST council meeting clearly records a tax base of around 11 lakh for service tax payers. When we referred to the report on dual control of the empowered committee of 2014, the service tax base mentioned was around 9 lakh. Suddenly, we find that the service tax payers number has escalated to 30.5 lakh out of which 26.41 lakh are shown as active tax payers,” Mitra wrote in letter dated 28 October.
“This implies that the service tax base has grown 3 times over 2 years. What is even more surprising is that even a month ago this fact was not told to the states,” he wrote, adding that the figures seem an afterthought surfacing only after the issue of dual control was discussed in the last GST council meeting held on 18-19 October.
Mint has reviewed a copy of the letter. Emails to Mitra and revenue secretary Hasmukh Adhia have not elicited a response yet.
Initially, it was agreed that the Centre will control all the existing 11 lakh service tax dealers. For goods traders, states were given administrative control over those with an annual revenue threshold of less than Rs.1.5 crore with a sharing mechanism between the Centre and the states to be worked out for traders above this threshold.
However, states later opposed the Centre’s exclusive control over service tax payers. They sought control over the big service tax payers while some also pointed out that some of these service tax payers already are under the VAT (value-added tax) net—for example restaurants.
In his letter, Mitra also pointed out that the disaggregated data of VAT, excise and service tax base based on thresholds of Rs.1.5 crore and 20 lakh has not been shared with the states so far. He also added that the states are likely to get the updated data only by 1 November which leaves them only a day to deliberate before the GST council meeting.
Mitra’s letter comes close on the heels of Kerala finance minister Thomas Isaac expressing concerns over the rate structure and the tax rates under GST as proposed by the Centre.
With states hardening their stand on these remaining important issues, the Centre is racing against time to meet the 1 April 2017 deadline for the implementation of GST. The Centre is hoping to resolve all these issues by the third week of November so that the central GST law and the integrated GST law can receive Parliament’s nod in the upcoming winter session(http://www.livemint.com/)

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