The finance minister Arun Jaitley shall reveal the timeline for the much-anticipated tax reform— GST—in the upcoming Budget 2017-18, which would be carried out on February 1 2017. The Part B of the Budget speech, which contains tax proposals, could bring half-yearly estimates of service, central excise duty and collections from other indirect taxes (excluding customs). India is keen to implement GST on or before September 15, 2017.
With the Centre and states leftover with several disputes over control of GST, the original deadline of April rolling out has been missing. Now the council meeting will be held on January 16 to discuss outstanding issues and fix an implementation date.
With GST now expected for a mid-year roll-out, the Budget for 2017-18, will be only expected half-year revenue estimates from existing central indirect levies. The FM may also give additional Rs 20,000-25,000 crore as compensation to offset tax revenue loss in the wake of the demonetization. The amount could be paid to states in 2017-18, as part of the GST compensation corpus of Rs 55,000 crore, the official said.
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The Centre is looking for a vertical division of the assessee-base without a turnover threshold. Under this model, both states and the Union government will have major powers on a certain fixed balance based on the number of tax payers, rather than the total turnover.