The Indian Express (Delhi Edition)
Bill for compensating states gets nod; CGST, IGST hang in balance
Clashes between Centre and states over minutes of previous meet
TENTH GST COUNCIL MEET
WITH THE clock ticking on the transition to the proposed Goods and Services Tax (GST) regime, the tenth meeting of the GST Council here managed to approve only one draft law pertaining to compensation to states, even as three crucial draft laws — Central GST (CGST), Integrated GST (IGST) and State GST (SGST) — got caught in a tussle between the states and the Centre.
Finance department officials of three states, who did not wish to be identified, said that there were clashes between the Centre and the states over the drafting of minutes of the previous GST Council meeting, which held up the deliberations at Saturday’s meeting. The dispute over the minutes related to the wordings over the division of new registrants, permission to states to tweak division of taxpayers after consultation with the Centre and referral of disputes relating to imports and exports to the Centre.
The Centre proposes to get all the three draft bills passed in the second half of the budget session of the Parliament and, therefore, it will be crucial for the Council to approve it in its next meeting on March 4-5.
“It’s the first time that we had to ask for deletion of certain items from the minutes of meeting held last month. The minutes said that new registrations would be divided 50:50 between the Centre and the states. It wasn’t discussed in the last meeting. Also, the minutes recorded said that states can later decide to change the 90:10 formula below Rs 1.5 crore turnover threshold in consultation with the Centre. Tomorrow, a state minister can say why should he leave 90 per cent and take 80 per cent. 90:10 has been decided, 50:50 has been decided but after that any state can sit with the Centre and decide to rework it on their own. It was not discussed in the last meeting,” a state finance minister, who did not wish to be quoted, said.
Another state’s finance minister, who also did not wish to be named, said that there was an argument over the division of new registrants under the proposed indirect tax regime. State government officials said they have asked for an equal division of new registrations between the Centre and the states. But after a certain period, the division of administrative control should be in the agreed upon formula of 90:10 below Rs 1.5 crore annual turnover threshold and 50:50 above the threshold. A central government official, however, said the ratio of division would be decided only after achievement of a certain threshold by the new registrants after a certain period of time.
The minutes of the ninth meeting of the GST Council, held on January 16, had recorded that the states have been given the concession to change the formula over and above the agreed upon 90:10 division of tax assessees below the annual turnover threshold of Rs 1.5 crore between states and Centre, respectively, and an equal division of assessees for a turnover of above Rs 1.5 crore, after consultation with the Centre. Also, it had said that the Council had approved equal division of new registrants.
After the Saturday’s meeting, finance minister Arun Jaitley said that the legal vetting of the CGST and SGST Bills had thrown up the need for clarifications on some of the provisions from the Council relating to issues on constitution of the appeals tribunal under GST, the definition of agriculture, the exemptions that have to be given during the transition phase, delegation of powers under GST and the composition scheme. During the discussion, it was also decided that a separate draft GST Bill needs to be floated for Union territories, mirroring the draft model GST law.
“...during the legal drafting of the CGST, SGST and IGST laws, certain contentious issues came to the fore and it was necessary to place all the issues before the Council again to take specific directions,” Jaitley said.
Jaitley said that the legal committee took clarifications from the Council and these will be incorporated in the draft laws, which will come up for approval in the next meeting on March 45. After the GST Council discusses legally vetted Bills, another meeting is likely to be held in Marchend in Srinagar to finalise the rules for the indirect tax regime.
He said that once the Bills are cleared by the Council, the next stage will be to fit the items into the various tax slabs.
The finance minister added that the Council had decided against giving additional powers to the Comptroller and Auditor General of India (CAG) under the indirect tax act. He said that CAG already has powers to scrutinise the finances.
“CAG is already empowered under the CAG Act to call for any information from the government in relation to public finances. Under the taxation law, it need not be separately given. The income tax act has not given any separate powers to CAG. Why should there be any separate powers under the indirect tax act?” Jaitley said. HANDCUFFED AND tied with white rope, the scion of one of the world’s biggest conglomerates, Samsung Group, was taken on Saturday for questioning by South Korean authorities after spending a night in a small detention cell.
Samsung Group chief Jay Y Lee was arrested on Friday for his alleged role in a corruption scandal that has led to the impeachment of President Park Geun-hye.
The 48-year-old Lee, who has a net worth of $6.2 billion, heads the technology giant that is the world’s biggest manufacturer of smartphones, flat-screen televisions and memory chips.
Lee arrived at the special prosecutor’s office at about 2:20 pm (0520 GMT) clean-shaven and expressionless. He was wearing a dark suit, white shirt and no tie as he was escorted by officials from a justice ministry van.
The special prosecutor’s office accuses Lee of bribing a close friend of the president to gain government favours related to leadership succession at the conglomerate. It said on Friday it will indict him on charges including bribery, embezzlement, hiding assets overseas and perjury.
He spent the night at the Seoul Detention Centre on the outskirts of the capital in a small single cell with a toilet in the corner behind a partition.
Special prosecution spokesman Lee Kyu-chul said on Friday that officials were working to supplement inadequacies in their investigation into Lee, without elaborating.
While Lee’s detention is not expected to hamper day-to-day operations at Samsung firms, which are run by professional managers, experts said it could hinder strategic decision-making at South Korea’s biggest conglomerate, or chaebol.
Samsung is going through a restructuring to clear a succession path for Lee to assume control after his father was incapacitated by a heart attack in 2014.
Decisions that could be complicated by Lee’s arrest include deliberations over whether to reorganise the group under a holding company structure, as well as its plan to abandon its future strategy office, a central decisionmaking body that came in for criticism during the scandal.