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To meet the target of April 1, 2017, Finance Minister Arun Jaitley is eyeing the Winter Session of Parliament to see through all three pieces of legislation connected with the Goods and Services Tax (GST) — Central GST, State GST, and Inter-State GST.
But Jaitley and his team are aware of the key challenges — including tax rates, exemption list, and dual control — that this tax reform faces. These issues were highlighted by the Opposition when the Constitution Amendment Bill to enable the GST regime was debated in the Rajya Sabha on Wednesday. Although the Congress supported the Bill, it pointed out that the tax rate will be the key.
“We will try to finish the roadmap for GST as soon as possible,” Jaitley told reporters on Thursday, adding that the government will try to table the Central GST and inter-State GST Bills in the Winter Session.
Revenue Secretary Hasmukh Adhia said that calculating the revenue base of the Centre and States, along with the compensation requirements of the Centre; finalising the GST rates structure; and listing the exemptions are some key challenges. Besides these, forming a consensus on the Model GST Bill, threshold limits, compounding limits, and cross empowerment to mitigate the ill-effects of dual control also need to be addressed.
Notice to Lok Sabha
Jaitley said the government has given notice to the Lok Sabha for voting on the fresh amendments to the Bill passed by the Rajya Sabha. The government hopes to get the Bill ratified by at least 16 States in the next 30 days.
“We are ready with the model GST Bill. Now, it is only the question of final approval from the GST Council,” the Revenue Secretary said.
Rate of GST
Jaitley reiterated that the government would try to have reasonable rates of taxation under the GST and indicated that it could gradually be lowered.
The Minister, however, remained non-committal on whether the rates would be included in the subsequent GST laws as demanded by the Congress. “Where the rate will be mentioned…is in the domain of the GST Council,” he said.
He also did not say whether the government would introduce the Bills as finance Bills, that was demanded by the Rajya Sabha.
Meanwhile, Adhia said calculations based on an 18 per cent standard rate under GST are “premature”.
“The rate structure should not be obnoxious but should meet the revenue requirement of the Centre and States,” he said.
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