Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: ACCOUNTING STANDARD :: cpt :: VAT Audit :: TAX RATES - GOODS TAXABLE @ 4% :: empanelment :: Central Excise rule to resale the machines to a new company :: due date for vat payment :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: ACCOUNTING STANDARDS :: TDS :: VAT RATES :: list of goods taxed at 4% :: ARTICLES ON INPUT TAX CREDIT IN VAT :: form 3cd :: articles on VAT and GST in India
 
 
« Indirect Tax »
 Indirect tax receipts to see small, brief hit’
 There is no tax on interest income of up to Rs3 lakh a year for senior citizens
 Chidambaram favours change in direct tax rates
  Further rationalization of revised simplified procedure for fixation of brand rates
 Kerala to accept demonetised banknotes for payment of state tax till Nov 24
 Centre-state gridlock over GST jurisdiction remains, could threaten tax rollout
 India to levy tax on investments from Cyprus from April 2017
 Why tax radar may detect your cash deposits after Nov 8
 Income tax notices to religious, charitable trusts
 ICAI starts course on accounting technicians
 More trouble ahead as Tata Trusts get I-T summons for tax avoidance

GST: Centre considers Gujarat model to win states' support
September, 12th 2014

The Centre on Thursday met states to consider the goods and services tax (GST) model proposed by the Gujarat government, as it tries to address their concerns on loss of revenue in the new tax regime and bridge trust deficit. Consuming states, however, opposed the proposal and it might be diluted if the Centre was to accept it.

"We met to discuss the proposal of the Gujarat government for sustaining revenue in GST," said an official after a meeting of the sub-committee of the empowered committee of state finance ministers.

After opposing it initially, Gujarat has now extended its support to GST with a rider that the Centre compensate it for any possible losses under the new system. The state proposed that exporting states should be permitted to retain two per cent of Integrated GST or IGST, the tax on inter-state movement of goods to be levied by the Centre. It will replace Central Sales Tax levied at present.

However, finance ministry officials opposed the idea and so did consuming states such as West Bengal and Bihar. The proposal got the backing of other producing states such as Haryana, Tamil Nadu and Andhra Pradesh. States are now negotiating whether the rate can be lowered to one per cent with a sunset clause.

"There were few takers for this model because if the Centre gives IGST to manufacturing states from its CGST kitty, the overall compensation for GST would come down. With the shrinking of divisible pool, BIMARU (Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh) states are going to lose," said another official.

Gujarat's argument is that the destination principle of GST gives no incentive to producing states to promote the manufacturing sector. Though the Centre has agreed to compensate states for any losses in the GST regime, Gujarat argued "it would be only for five years, while this would be a permanent loss".

Though the United Progressive Alliance government had rejected Gujarat's earlier proposal to let states collect both CGST and SGST and then transfer to the Centre its component, Thursday's meeting between officials of the finance ministry and states signals that the National Democratic Alliance government might be open to the suggestion.

The finance ministry has been trying to evolve a consensus on the Constitution amendment Bill for the rollout of GST. Among the contentious issues was states' demand for a provision in the Constitution to compensate them for any losses they made under the proposed indirect tax regime. The ministry is now considering another legal framework that will ensure the Constitution does not have to be amended for this purpose, and at the same time, even states' trust does not erode.

To resolve another nagging issue - of petroleum products, which states want constitutionally kept outside the GST ambit as these comprise 26 per cent of their revenues - the Centre is likely to include these products in the new regime, but taxing these at the rate of zero per cent. States could continue to levy sales tax or value-added tax on these, while the Centre would retain its right to impose excise duty.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Enterprise Resource Planning Solutions ERP Solutions Enterprise Resource Planning Software Solutions ERP Software Solutions Supply Chain Management Solutions SCM Solutions Supply Chain Management Software Solutions SCM Software Solutions Enterprise Resource Planning Solutions India ERP Solutions India Enterprise Resource Planning Software Solutions India ERP Software Solutions India Supply Chain Management Solutions India SCM Solutions India Supply Chain Management Software Solutions India SCM Software Solutions India

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions