Integrated GST issue, fixing registration limit concerns for Amit Mitra, GST committee chairman

KOLKATA: It's not just the rates that appear to be the bone of contention in the way goods and services tax (GST) will be activated, issues such as IGST (Integrated Goods and Service Tax) in inter-state trades and fixing the registration threshold will become talking points in the coming days, said Amit Mitra, chairman of the GST committee, who is also the finance minister of West Bengal.
Since the GST rates would be fixed by the council, Mitra said that the empowered committee has to fix issues such as IGST and threshold. Mitra went on to add that he has already started receiving calls from state finance ministers expressing concerns over the amendments related to IGST and SGST (State Goods and Service Tax).

"We have overcome the first bottleneck, but it is a long process. Now it is a Revenue Neutral Rate, but we have to have an optimal rate because in India we can neither have a minimal nor a maximal rate. Rates should not adversely affect the common man and there has to be a protection for fiscal capacity and stability of the states," Mitra told ET.

The minister, however, appeared more worried about the IGST issue than rates. Calling the IGST issue as a potential crisis if not addressed properly, he said it turned out to be one of the 'serious concerns' of the committee.

It is learnt that the chairman of the empowered committee has written a letter to finance minister Arun Jaitley hours before the bill was placed in Rajya Sabha, suggesting that the government should ensure that states are authorized to administer GST on supplies in the course of inter-state trade and commerce.

The committee raised the issue that states are not being given any powers of administration and enforcement in IGST in the constitution amendment bill, which will impact their collection under SGST.

Mitra also flagged off the issue of registration threshold for states as another crucial point. Explaining that the registration threshold is likely to be around 10 lakhs, he said it will again be discussed in the meeting as Delhi's threshold is much more -- 20 lakhs - while some states have more than that as their threshold.

"Apart from the rate, there are several other issues that need to be addressed. The entire economics of the country will change. We have started confidence building measures among states and they were assured that there won't be a revenue loss for them. But, we have to have a holistic approach towards the states' concerns," said Mitra.

Harping on the dual control issue, he said that the nature of dual control would be decided by the council, though there is already a structure in place for that. However, there should not be dual control for the businesses whose turnover is below Rs 1.5 crore. "GST will bolster the federal polity of the country and it will bring comfort between the Centre and states' economic relations," said Mitra.