The transformative indirect tax regime -GST is all set to be implemented from July 1st, 2017 as the Centre and states settled all of their remaining areas of divergence. At the end of the ninth meeting of the GST Council Monday, the Finance Minister Arun Jaitely hoped that implementing the accord from July will give time to the industry to make the necessary arrangement for the roll out. Commenting about the implementation from mid-way of a financial year, Finance Minister observed that there is no problem in doing it so as GST is a transactional tax.
Of the areas of conflict between the centre and states, the most important one was the tax right on low value assesses. Here, as per the agreement, states will tax 90% of the assesses whose turnover is upto Rs 1.5 crore. The remaining 10% will be taxed by the centre.
Another debate was about the right to impose tax on economic activities that are done on territorial waters. Here, the meeting decided that states can impose and collect tax on those falls within 12 nautical miles.
In the usual GST format, the centre and states will share tax revenues at 50:50 ratio. Regarding the IGST which is a tax on cross border state movement of goods and services, the center will levy and collect it barring exceptional cases.