India will likely be able to roll out the goods and services tax (GST) from July 1 following a breakthrough over the seemingly intractable issue of tax administration after the Centre accommodated states’ concerns. Under the proposed tax regime, 90% of all assessees with a turnover of Rs.1.5 crore or less will be assessed for scrutiny and audit by state authorities, the remaining 10% by the Centre. Above that limit, Centre and states will assess in a 50:50 ratio. Each assessee would be assessed only by one authority. The power to levy and collect the I-GST lies with the central government but states will also be cross-empowered in the same ratio as above through a special provision in law. Any IGST disputes among states will be resolved by the Centre. Territorial waters extending to 12 nautical miles fall under control of the union government but as per convention, states will be empowered to collect tax on any economic activity in this zone. What remains now are rates for various goods and services, which will be decided in March 2017. With indication of revised implementation date of July 1, 2017, for GST, industry gets much needed clarity and some additional time for preparation for this huge reform.

(ET Tech)