92% of 7 lakh traders in state enrol with GST network

92% of 7 lakh traders in state enrol with GST network

Migration to new tax regime to be completed by July-end

92% of 7 lakh traders in state enrol with GST network

An estimated 92% of the seven lakh traders in Karnataka have enrolled with the Goods and Service Tax (GST) Network, the highest compliance compared to other states .

The state Commercial Taxes department has completed the process of GST migration (process of document verification and issue of registration certificates) for 48% of those who have enrolled. The GST migration of all those who have enrolled will be complete by July-end, senior officials in the department said.

The officials said that while the department is fully prepared for the GST rollout on July 1, the real challenge will come when the traders start filing their online returns from August.

Henceforth, the Commercial Taxes department will work in close coordination with the Central Board of Excise and Customs. The two departments hitherto were working independent of each other. However, with the GST subsuming Value Added Tax (VAT), entertainment tax, entry tax, luxury tax (collected by the Commercial Taxes department) with central excise and service tax (collected by the Board), the two departments will be sharing information online on revenue collected, registrations, audits, assessments, on a constant basis.

However, there will be no change in the structure of the department or relocation or closure of any offices, the officials said.  The state government has held training programmes for 1,000 officers on the modalities of implementation of the new tax regime.

The department will also be closely monitoring the resource mobilisation under the new regime. The department will be getting revenue from the state component of the GST collected, which will henceforth be referred to as Karnataka GST (KGST) in all communications.

 The officials said the GST will not have much of an impact in the state. “It is felt that the GST will have negative revenue implications on manufacturing states. Unlike Maharashtra, which is a manufacturing state or Kerala, which a consumer state, Karnataka has a mixture of both the components. Fears that tax collection will be affected are a little overstated,” an official said.

The total budgetary target set for the department for the financial year 2017-18 is Rs 55,000 crore and any shortfall will be made good by the Centre. The state government recently gazetted the Karnataka Goods and Service Tax Rules, 2017, the last of the statutory requirement for rollout of the new tax regime.

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