The central government has set a new deadline for goods and services tax (GST) as April 1, 2017, a good one year after the current one of April 1, 2016.
Top finance ministry sources said the announcement may be made in the upcoming Budget session. The official said major progress would be made in budget session on GST, which would subsume all indirect taxes into one uniform levy across the country.
The official said initially the finance ministry considered October 1, 2016, deadline, but after getting inputs from various sources including field formation on GST infra preparation, it is now considering to extend the implementation of deadline for a year.
Revenue department sources said the new GST deadline would be announced in the Budget, in which the government may also announce massive changes in central excise exemption, service tax hike in line with the new GST.
The government has asked revenue officials to evaluate the removal of 1% inter-state charge. According to the existing proposal, if a consumer state collects GST then manufacturing state stands to lose out on tax revenue. This had led to a Rajya Sabha panel recommend 1% additional tax to compensate the producer state's loss. The clausse could be scrapped in the GST amendment Bill in the Budget session.
Vimal Jain, head of indirect tax committee at PHD Chambers of Commerce and Industry, said, "Delay of GST is detrimental to the growth and ease of doing business in India. All political parties should support the early passage and implementation of GST in India at an early date so as we can gets fruits of the new tax."
In GST regime, online return will be mandatory for each taxpayer. The government has realised that apart from policy hurdle they need strong and tested infrastructure before implementation of the new tax regime.
Each taxpayer needs specific software for returns, which has to sync with government's proposed GSTN portal, experts said.
Even if the GST Bill were to be cleared in the winter session, it would have been impossible to implement it from first April 1, 2016 for several reasons, experts said.
The draft GST laws and rules have not yet been finalised and put in public domain for the taxpayers and other stakeholders to respond. Certain issues like threshold, common list of exemptions are still being negotiated between Centre and the states. Without these getting finalised, the taxpayers won't have an idea of the contours of GST, and so cannot prepare fully for the GST. Even the GST Net would need final picture of GST to finalise the IT infrastructure, they said.
Ex-chairman of Central board of excise and custom S D Majumdar told dna, "It's a blessing in disguise that the Bill didn't get passed in December. The country will now have time to prepare. But the GST laws must be finalised immediately and put in public domain. And, the government must reach out to the Congress with earnestness to get the Bill cleared in this Budget Session."
Also, the GST base has not been decided yet and it depends on threshold limit in terms of turnover. Threshold limit decision will depend on existing list of indirect tax exemptions, especially on central excise front. After the Budget, the GST Council would decide the threshold limit of GST exemption. Threshold limit decision will impact revenue neutral rate (RNR) as proposed 17-18%.
The central and state GST would be applicable to all transactions of goods and services. A threshold exemption would apply to both central and state GST
Source:-http://www.dnaindia.com/money/report-gst-deadline-likely-to-be-extended-by-another-year-2162660
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