This is with reference to Arup Roychoudhury and Dilasha Seth’s report, Centre, states divided on who will control GST” (November 6). Given the radical shift from the existing system of taxing goods and services to the goods and services tax regime vesting concurrent jurisdiction to the Centre and states — except for interstate supplies that would be under the exclusive jurisdiction of the Centre — differences between the two were only to be expected.
There seems to be an attempt to seek consensus to avoid assessees from being subjected to simultaneous control by both the Centre and the states over the same transaction. While decrying “… two competing assessing authorities for the same assesses”, the finance minister has hinted at the concept of adopting either a horizontal or a vertical model to address the issue.
The horizontal model would likely favour states, granting them exclusive control over entities with a turnover of up to ~1.5 crore, in addition to concurrent jurisdiction over larger units. The Centre seems to prefer “cross empowerment” under a vertical control model for scrutiny and audit. Under this, both the Centre and the states will exercise concurrent jurisdiction over all non-exempt assessees, subject to some executive guidelines.
“Cross empowerment”, as it is being discussed, is a non-starter. It would lead to administrative chaos across the country, with assessees getting caught in a jurisdictional battle between the Centre and states.
Once the Constitution is amended to roll out GST, any attempt to evolve an informal mechanism for reducing dual control outside of the law would militate against the constitutional mandate. Dual control should be avoided.
S K Choudhury Bengaluru
There seems to be an attempt to seek consensus to avoid assessees from being subjected to simultaneous control by both the Centre and the states over the same transaction. While decrying “… two competing assessing authorities for the same assesses”, the finance minister has hinted at the concept of adopting either a horizontal or a vertical model to address the issue.
The horizontal model would likely favour states, granting them exclusive control over entities with a turnover of up to ~1.5 crore, in addition to concurrent jurisdiction over larger units. The Centre seems to prefer “cross empowerment” under a vertical control model for scrutiny and audit. Under this, both the Centre and the states will exercise concurrent jurisdiction over all non-exempt assessees, subject to some executive guidelines.
“Cross empowerment”, as it is being discussed, is a non-starter. It would lead to administrative chaos across the country, with assessees getting caught in a jurisdictional battle between the Centre and states.
Once the Constitution is amended to roll out GST, any attempt to evolve an informal mechanism for reducing dual control outside of the law would militate against the constitutional mandate. Dual control should be avoided.
S K Choudhury Bengaluru
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