The First Discussion paper on Goods and Service Tax has raised more questions than it seem to have addressed to. The Central Government has unfolded its intentions to Tax the Sales of Goods. Consequently they have shown a carrot to the states with empowering them to Tax the Services .
As on today ,Centre is empowered to tax services and goods upto the production stage, the States have the power to tax sale of goods. The States do not have the powers to levy a tax on supply of services while the Centre does not have power to levy tax on the sale of goods. Thus, the Constitution does not vest express power either in the Central or State Government to levy a tax on the ‘supply of goods and services’.
Moreover, the Constitution also does not empower the States to impose tax on imports. This calls for a major change in the outlook of the Indian Constitution. Therefore, it is utmost important to have a Constitutional Amendments for empowering the Centre to levy tax on sale of goods and States for levy of service tax and tax on imports and other consequential issues.
This Uphill task is entrusted to a Joint Working Group. Right from preparing draft legislation for Central GST, a suitable Model Legislation for State GST; Rules and procedures for Central GST and State GST; drafting of legislation for IGST ; rules and procedures thereof ; address to the issues of dispute resolution and advance ruling and many more .
Many questions like whether the Central Board of Customs and Excise with be rechristened? Will the Central Excsie officers will henceforth be called GST officers? Once the fundamental constitutional change form “Duty” to “Tax” is made , will the powers of the officers remain same ?
With the Central GST on sales , inter state and intra state transtactions , effective monitoring of the same in absence of a well placed National integrated computerization , etc All this with a deadline on April 2010 seems to be a fantasy. Now one thing is for sure ,it’s going to take an era to convert this Off-White paper to a Pure White paper on GST.