Different Thoughts Showing Different Paths

By Author: LawCrux Advisors
Total Articles: 15
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Nothing is going right for the future of the Goods and Services Tax. This meeting of the Empowered Committee of State Finance Ministers also failed to provide any fruitful results. In this meeting, politics comes upfront as the Congress ruled States agreeing with the Centre’s proposal and the BJP ruled states differing with the Centre’s viewpoint.
Some states are favouring the phased approach for amending the Constitution whereas other states are of the view that whatever Constitutional Amendment is required should be made fully before taking any further step. In the phased approach, the main focus is on allowing the Centre and the States to share their tax base and for this only initial amendment will be made to the Constitution. However, the two main pillars of the Goods and the Services Tax i.e. GST Council and the Dispute Settlement Authority will be kept outside the Constitution to start with and if required, both could be given a Green signal with Constitutional Amendment at a later stage. It looks like that an experiment will be carried out with GST and if that not comes out successful than the other alternatives ...
... are also available that can be looked upon at a later stage.
In another development in this meeting Mr Asim Dasgupta, the Chairman of the Empowered Committee of the State Finance Ministers proposed to form a GST Council with the Union Finance Minister as its Chairman and one of the State Finance Minister as Vice- Chairman. The idea behind this is that GST council would work like a registered society with the Dispute Settlement Authority coming under this body. “If disputes are resolved you do not have to set up a dispute settlement body”.
The Empowered Committee representatives will now meet Finance Minister Mr. Pranab Mukherjee to inform him about the suggestions and concerns of each state that comes out in this meeting.
Lets see now what our Finance Minister Mr. Pranab Mukherjee have to say about all this but one thing is certain that being a very complex issue [i.e. GST] , a lot of barriers are still awaiting in its path.
What is GST?
GST is a tax on goods and services with comprehensive and continuous chain of set-off benefits from the Producer’s point and Service provider’s point up to the retailer level. It is essentially a tax only on value addition at each stage and a supplier at each stage is permitted to set-off through a tax credit mechanism.
Under GST structure, all different stages of production and distribution can be interpreted as a mere tax pass through and the tax essentially sticks on final consumption within the taxing jurisdiction.

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