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| « Family-run cos centralise HR, accounting functions... | India Infrastructure gets tax sops... » |
GST to carry advance tax ruling comfort |
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| December, 22nd 2007 |
Taxpayers will be able to ascertain their tax liability before entering into a transaction under the unified goods and service tax (GST) regime. The GST regime will provide for advance ruling on the lines of the Authority for Advance Rulings (AAR) for taxes levied by the Centre.
Advance rulings are binding on both the tax department and the taxpayer who has sought the ruling.
According to the new modified draft circulated to state governments, there would also be a single dispute resolution mechanism at the federal level. This mechanism will be set by the Centre as well as the states. The issue also figured in the discussions at the meeting of the empowered committee on Thursday. Sources said the proposal for providing advance rulings has also found favour with state governments. This system would make the GST setup more taxpayer-friendly and take it one step ahead of the present value-added tax system.
The draft also seeks to limit deviations in the rates and items under the proposed tax regime in various states. While the value-added tax regime allows for deviations up to 1%, most state governments are not adhering to this limit. State governments have been asked to firm up their views on deviations to maintain uniformity.
It has been decided that there would be two slabs for taxes on goods but one slab for services. Also, state governments would be able to levy tax only on intra-state services. Inter-state services would be taxed by the Centre.
The report submitted by the joint working group on GST was accepted by the empowered committee in November. However, some modifications were made in the draft before Thursdays meeting after taking into account state governments responses.
The discussions held on Thursday will also be reflected in the final draft, which would be taken up for discussions on January 24. If the draft is approved by the empowered committee, it would be recommended to the Centre. |
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