Many large companies to move Appellate Authority against GST demand notices
In recent days, an increasing number of GST notices have been sent to many companies mainly on account of alleged discrepancy in input tax credit (ITC).
The Union Cabinet on Wednesday approved the setting up of the 15th Finance Commission that will decide the distribution of tax proceeds among the Centre, states and local bodies. The Finance Commission is set up every five years and the government had allocated Rs 10 crore in the 2017-18 Budget for it.
Briefing the media after the Cabinet meeting, Finance Minister Arun Jaitley said, “We have given an in-principle approval to setting up the 15th Finance Commission and its terms of reference will be notified in due course of time.” Jaitley said it usually takes two years for the Finance Commission to finalise its recommendations.
The exercise is likely to be different this time due to the Goods and Services Tax (GST), he added, referring to the new indirect taxation system that unifies the country into a single market. Sources indicated that former Revenue and Expenditure Secretary NK Singh is likely to head the commission but an official confirmation is awaited. The Finance Commission is a body set up under Article 280 of the Constitution. Its primary job is to recommend measures and methods on how revenues need to be distributed between the Centre and the states.
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The recommendations of the previous 14th Finance Commission, chaired by former Reserve Bank of India governor YV Reddy, are valid from 2015 to 2020.
The recommendations of the 15th Finance Commission will be implemented for the period starting 1 April 2020 to 31 March 2025. Usually, a Finance Commission is set up two years before the end of the period for which it sets rules for the devolution of taxes.
The cabinet of the previous United Progressive Alliance (UPA) government had cleared establishing the Finance Commission in October 2012 and appointed Reddy as its chairman in January 2013. The Commission submitted its report in February 2015 to the National Democratic Alliance (NDA) government. The government spent a total of Rs 30.58 crore on the commission between 2012-13 and 2014-15.
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