The pace at which the government is moving ahead in order to ensure that GST is implemented in India soon needs to be appreciated. There was a scheduled two day meeting of the GST Council on 4th and 5th March 2017. However, the GST council wrapped up its agenda within a day.
‘One nation one tax’ phrase is being heard very often for GST in India. So will we have only one law or more than that? India under GST will have the different set of statutes. For example, Centre GST (allowing Centre to levy tax on supply of goods and or services in states). State GST (enabling state to levy tax on supply of goods and or services within a state). This will be a replica of CGST. Integrated GST (allowing Centre to levy tax on inter-state trade or commerce). Union Territory-GST (allowing Centre to levy tax in union territories without legislature). Union territories’ with legislatures (Delhi and Puducherry) would be same as SGST.
In a very constructive meeting, the GST council formally approved the CGST and IGST laws on 4th March 2017. Considering that the target of the government is that the GST laws are placed before the Parliament in second budget session commencing on 9th March 2017, the laws will now be vetted from a legal wording perspective post which the same would be tabled before the cabinet for their approval. Once the laws are cleared by the cabinet, the same would be presented before the Parliament in the second half of the budget session.
Moving on the SGST law, the legal committee would be working for the next 3 days to finalise the SGST law. Thereafter, the same would be sent to the state legislatures and union territories’ with legislatures (Delhi and Puducherry) for their approval. For the remaining Union Territories, UT – GST Act would be formulated (which would be same as the SGST law). Such law would be passed by the Parliament.
The GST council has already announced that the SGST and UT-GST law would be discussed on 16th March 2017 which will be the 12th GST council meet in a very short span of few months. This itself shows the urgency of the government in taking fast steps towards implementation of GST.
On the rates, the multi – tier structure for goods has already been announced. A major meeting would be held soon where fitment of rates for various goods/ services would be presented before the GST Council and approved.
Clear message to the trade and industry is that enough focus needs to be given to GST considering that now the laws are almost finalized and rate structure is in public domain.
On the compliance side, migration of the existing VAT registrations to the GSTN portal has already commenced from November 2016. Recent statistics indicate that 50% to 90% of the businesses have migrated to GSTN portal. So the State registration migration looks under control. Now the excise migration commenced early this year and service tax in February 2017. The data here is alarming as only a paltry 2.94% in central excise and 8.22% in service tax have migrated. This needs to be given a push and accordingly the Central Board of Excise and Customs (CBEC) has urged its officers to conduct workshops and trainings for trade and industry so that due education on the migration is imparted.
To conclude, we see movements on track for successful launch on July 01, 2017 by the Government. This is one such example where government is ahead of industry in GST preparedness.
The writer is Partner – Indirect Tax of PwC
Views expressed are personal.
Preetam Singh, Consultant – Indirect Tax, PwC also contributed to this article.