In a significant development, the States of the Country have reached to a consensus with regard to HSN Coding, Threshold and Exemptions in connection with implementation of Goods and Services Tax (GST) regime. This was announced at a meeting of the Empowered Committee of State Finance Ministers held at New Delhi today to discuss wage and means for implementation of the new tax regime, GST in the Country, an official statement said on Wednesday evening.
Speaking on the occasion, Rather recalled the discussions held in the Bhubaneswar meeting regarding Dual Control, Threshold, Exemptions and IGST when the Committees to examine these issues were formed. He informed the Empowered Committee that these Committees have now submitted their reports. The reports of the two Committees, viz ‘the Committee on problem of Dual Control, Threshold and Exemptions in the GST Regime’ and ‘the Committee on IGST and GST on imports’ were put before the Empowered Committee for discussion. States gave their views on the various aspects of the reports and highlighted their concerns, the statement said.
The J&K’s Minister for Finance, Abdul Rahim Rather who is also the Chairman of the Empowered Committee of State Finance Ministers.
Rather observed that, generally, there was a consensus on a number of matters like HSN coding, Exemption List and Dual Control. On the issue of Threshold various suggestions came from the States.
Rather said that for the sake of smooth transition to GST Regime, relief should be given to dealers by way of reducing their number in the tax net. The loss of revenue from smaller dealers will be out weighted by the reduced cost of collection. He added that the issue regarding dual control as a result of dual GST i.e. CGST and SGST has to be solved by empowering the States to deal with matters both pertaining to CGST and SGST up to a specified limit. Accordingly, it was resolved that dealers with a turnover of up to 1.5 crore will have to be dealt with by the State authorities exclusively, the statement informed.
With regard to the report on IGST, the Finance Minister Gujarat suggested that their views should be taken note of before the report is considered in the Empowered Committee.
Responding to the queries of reporters after the meeting, Rather said that the latest Constitutional Amendment Bill was discussed elaborately in the Empowered Committee in its last meeting before the recommendations were made to Government of India, it said.
The response of Government of India is still awaited. It is hoped that Government of India will react to these recommendations shortly in view of the assurance held out by them that the bill will be introduced in the Parliament during the winter session, it added.
“In today’s meeting, consensus was reached among the states with regard to HSN Coding, Threshold and Exemptions and the Government of India is being informed accordingly. In order to deal with the problem of dual control, it was resolved that the dealers having turnover of up to 1.5 crore will not be dealt with by the Central Government. Instead, the matter will be dealt with by the State Taxation Authorities,” the statement said.
It was also decided that the Empowered Committee led by its Chairman will meet the 14th Finance Commission shortly to appraise it about the impact of GST on revenues of the States. The Committee will urge the Commission to take care of the losses likely to be suffered by the States in the initial years of the implementation of the new GST Regime, the statement concluded.