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 today.
These challenges include calculation of revenue base of Centre and states and compensation requirements, structure of GST rates, a 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 would 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 about the threshold limit of the 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.
Concerning keeping businesses with the turnover of Rs 1.5 crore out of CGST ambit, Adhia said the GST council would take a final call.
The Rajya Sabha last night cleared the long-pending GST Constitutional Amendment Bill, and it has to go back to the Lok Sabha now for ratification.
Once Parliament approves the Constitution Amendment Bill and 50 percent 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.
