Finance minister Arun Jaitley Saturday said GST is a transactional levy that, unlike income tax, can be implemented anytime during the year. The goods and services tax (GST), he said, can be implemented anytime between April 1 and September 16, 2017, in accordance with the constitutional amendment legislation that allows a national sales tax by subsuming central and state levies. The GST Council has resolved 10 issues and only one pertaining to administration of tax is pending, he said.
“It is a transactional tax and not an income tax. Transactional tax can start in any part of the financial year and, therefore, the range of timing when it has to come into force because of constitutional necessity is April 1, 2017 to September 16, 2017. Hopefully, the earlier we do, the better it is for the new taxation system,” Jaitley said at the FICCI annual general meeting.
Jaitley alluded to “certain kinds of turf issues” that are yet to be resolved. “But the constitutional embargo is very clear. The entire amendment was notified on September 16, 2016, and it permits the old taxation regime to continue for a period of one year,” he said. “So on September 16, 2017, as far as the current mode of taxation is concerned, the curtain will be down. Therefore, neither the Centre nor the state can go in for collection.”
Saying GST will usher in a common taxation and should lead to a federal bureaucracy, Jaitley felt that both the Centre and states should figure out sharing of the tax assessment. Ideally, he said, it should be proper for the issues to be resolved at the beginning of financial year on April 1 for the new regime to kick in. “But then, in any case, nobody has the luxury of time,” he cautioned.