NEW DELHI India's new nationwide sales tax is now expected to be rolled out from July after Finance Minister Arun Jaitley on Monday managed to break a three-month long deadlock on who would administer the tax.The long-awaited Goods and Services Tax (GST) was earlier proposed to come into effect from April 1. Its timeline, however, was disrupted by the deadlock on how to collect the new tax that would have federal and state elements.The new levy is hailed as India's biggest tax overhaul since independence in 1947, and is expected to transform Asia's third largest economy into a single market for the first time.After a meeting with state officials in New Delhi, Jaitley said that July 1 was a "more realistic" date for the GST launch as companies needed ample time to switch over to the new tax. "Since it's a transactional tax, it can be introduced any time," Jaitley told reporters.
Under the agreed arrangement, state and federal tax officials would audit and administer businesses with annual turnover of up to 15 million rupees ($220,000), with 90 percent of them coming under the purview of local states and the remainder under federal authorities.Businesses above the 15 million rupees threshold would be controlled by state and federal in a 50/50 ratio.
Jaitley also conceded some taxation powers over inter-state and sea trade - which come under federal jurisdiction - in response to demands from some states to levy and collect tax. A council of federal and regional authorities will next meet on Feb. 18 to finalise four legislations, setting out the operational details of the new tax.
($1 = 68.1037 Indian rupees) (Reporting by Rajesh Kumar Singh; Editing by Dominic Evans)
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Updated Date: Jan 16, 2017 20:27:27 IST