Revenue Comments on GST
THE Central Revenue Department has sent its comments to the Empowered Committee on the First Discussion Paper on GST. Some of the comments are:
++ Dual GST model with appropriate binding mechanism to harmonise the various important aspects of the GST like rate structure, taxation base, exemption etc. between Centre and States is agreed.
++ IGST on inter-State transactions should be levied by the Centre. SGST on imports should also be levied and collected by the Centre. Centre should pass on SGST collection on imports to concerned States on the destination principle.
++ There should be a common base for taxation between Centre and States.
++ The threshold for goods and services should be common between Centre and State on one hand and between goods and services on the other.
++ There should be a uniform threshold for goods and services for both SGST and CGST.
++ There should be a uniform registration system through-out the country and this registration system should enable easy linkage with Income Tax database through use of PAN number.
++ Since the tax base is to be identical for the two components, viz., CGST and SGST, it is desirable that any dispute between a taxpayer and either of the tax administrations is settled in a uniform manner. The possibility of setting up a harmonised system for scrutiny, audit and dispute settlement may be developed.
++ Alcoholic beverages should be brought under the purview of GST in order to remove the cascading effect on GST paid on inputs such as raw material and packaging material. Sales tax / VAT and State excise duty can be charged over and above GST. Similar dispensation should apply to opium, Indian hemp and other narcotic drugs and narcotics but medicines or toilet preparations containing these substances should attract only GST.
++ There should be a single rate of SGST both for goods and services.
++ SGST and CGST rates are required to be put in public domain much before initiation of legislative action.
++ Taxation of import of services may be on the basis of reverse charge model, as is being done at present.
++ The Joint Working Group (JWG) has held several meetings by now. Department of Revenue is closely working with Ministry of Law, Government of India, for finalisation of draft Constitutional amendment. The issue of empowering States to levy GST on imports has been deliberated by the JWG and the view which has emerged out of discussion is that the Centre shall collect GST on imports and pass on the SGST component of it to concerned State on destination principle.
++ The provisions related to dispute resolution, advance rulings and other business processes need to be harmonised between Centre and States.
++ Empowered Committee may prepare a plan with clear timelines for orientation of stakeholders so that required steps may be taken by all the States in time.