The Centre and states finally managed to break the logjam after months of tough negotiating on two critical issues concerning the goods and services tax (GST) and ended up pushing the rollout date from April to July. Notably, both sides decided to cede some space to draw an agreement that eluded the GST Council during the last six consultations.
States required exclusive control over small units, with annual turnover under Rs 1.5 crore on the issue of dual control. Thus, the council approved a formula which will let states run and control 90 per cent of the smaller entities, with the remaining coming under the Centre’s regulation.
On the second argumentative matter of levying tax on the high seas or within 12 nautical miles of the coast – the GST Council certain to follow with the states. States wanted to hold the power to tax economic activity even though it upheld that constitutionally, the Centre had jurisdiction over territorial waters.
For units with yearly turnover of above Rs 1.5 crore thresholds, the Centre and states will divide the control equally. However, the finance minister Arun Jaitley said each taxpayer would have to cope with only one agency and be evaluated once.
