Letters: Revenue risk

It was expected that the chief of the Central Board of Excise and Customs (CBEC) would raise concerns on behalf of his officers in the presence of Finance Minister Arun Jaitley over the likely impact of the proposed administrative structure for the goods and services tax (GST).

The decision to entrust the jurisdiction over 90 per cent of entities of both manufacturers and service providers with annual turnover below Rs 1.5 crore entirely to state governments and sharing this equally for entities above the threshold given has been arrived at the last GST Council meeting after much deliberation. It is unlikely that the decision would be revisited at this stage, at least. 

Assigning the jurisdiction in the first case to state government officials with not experience or knowledge of taxing services is not only unimaginative and administratively flawed but also fraught with risk to revenue. Unlike goods, taxing services is more complex. In the process, the Union has reduced itself to the status of a residual player in revenue mobilisation. This will have consequences.  

S K Choudhury | Bengaluru

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