New Delhi: With the Lok Sabha passing the last batch of goods and services tax (GST) legislation on Wednesday, the stage is set for a 1 July rollout of the ambitious tax reform. In an interview, revenue secretary Hasmukh Adhia explains the government’s preparedness and elaborates on the government’s efforts to ensure a smooth transition for industry. Edited excerpts:
What is the government’s road map for achieving the 1 July deadline for rollout of GST?
We are fully ready with the laws and the rules. All the rules should be finalized in the next meeting on 31 March. The information technology systems are getting ready and the progress is very satisfactory. The migration of old value added tax, service tax and excise dealers is progressing at a good pace. About 60% of the dealers have migrated. We will be doing a campaign to bring the remaining 40% on board. The major challenge which will remain will be industry awareness. We will start a campaign to spread awareness about GST among businesses from 1 April.
When will the trial run start?
We will start this is as early as possible. We will start the live testing long before 1 July. We are only waiting for the final rules to come because the GSTN system also has to adapt them to the system.
When will the states pass the SGST laws?
We have already sent the SGST law to states. SGST law has a cross-reference to all the four laws that were passed by the Lok Sabha. So they will have to wait for the four central acts to be notified. If Rajya Sabha clears it next week, then probably it will take us around eight days to send it to them. States will have to call a special session in April or in the first week of May. All the states will have to pass it because the taxation powers is drawn from this.
When will the rate-setting process be complete?
The rate-fixing will be a time-consuming process but there is no hurry. The rates can also come in at the last moment. We will start with the exemptions and then go slab-wise.
How will you address individual concerns of states while fixing rates? For instance, how will taxation of coconut oil which is a very important item of consumption in one state be handled?
The council has sorted out so many insurmountable problems in such a short period of time through consensus. For rates, we may not require more than three meetings. The formula is known. The tax rate will be around the current tax incidence including VAT and excise duty. We don’t have to make too many exceptions. Most of the food products will be zero rated.
How will services be divided among the different tax slabs?
In services, where abatement is offered, we will have to fit that service into a slab closest to it. Very few items of service tax will be in slabs other than 18%.
Will service providers be offered relief through the mechanism of centralized audit now that single registration has been ruled out?
Centralized audit is a possibility but centralized registration will not happen. The 10 working groups we have set up to look into industry-specific concerns will prepare sectoral papers and look at simplifying the procedures for these industries
When will the Central Board of Excise and Customs be restructured?
We plan to do the restructuring by 1 May so that manpower movement happens in time. The name change will happen through another law which will come later. We will also undertake change management to deal with the perceived fear of loss of powers.
How many officers have been trained for GST?
Around 51,000 officers of a total workforce of around 60,000 officers of the states and the centre have been trained