Submitted by Tax_centrik on 17/02/2017

States have been given the leeway to tweak the criteria for division of taxpayers after “consultation with Centre” in respect of cross empowerment under the proposed Goods and Services Tax (GST).

The minutes of the ninth meeting of the GST Council, held on January 16, record that the states have been given this concession over and above the agreed upon 90:10 division of tax assessees below the annual turnover threshold of Rs 1.5 crore between states and Centre, respectively, and an equal division of assessees for a turnover above Rs 1.5 crore.

The division of taxpayers will be switched between the Centre and the states at regular intervals as per the decision of the Council. For new registrants, the Council has agreed to do equal division between the Centre and the states.

The arrangement between the Centre and the states in the ninth GST Council meeting to break the deadlock on division of control has been seen as a compromise on part of the Centre, as it has lost out on the maximum share of taxpayers under the threshold of Rs 1.5 crore.