Dual control, demonetisation to be sore points at GST Council meeting

Surabhi New Delhi | Updated on January 12, 2018

Finance Minister Arun Jaitley

Centre keen to finalise draft legislations at the two-day meeting which starts today

The GST Council, which is lead by Finance Minister Arun Jaitley and has Finance Ministers of all States as members, will begin its eighth round of consultations from Tuesday. During the two-day meeting, it is expected to finalise the draft of the model Integrated GST (IGST) Bill, the draft compensation Bill and also reach a solution on the thorny issue of cross-empowerment.

The Centre is keen to finalise the draft Goods and Services Tax (GST) legislations in the meeting to ensure that they can be tabled in Parliament and State assemblies in the ensuing Budget Session. But, the spectre of demonetisation and administrative control over taxpayers will continue to cast a shadow over discussions of the Council in the New Year.

“Once cleared by the GST Council, they will have to be cleared by the Cabinet and then introduced in Parliament,” said an official. The Budget Session of Parliament is likely to commence later this month.

States’ demand

However, States are sticking to their demand to have exclusive control over all businesses with an annual turnover of up to ₹1.5 crore and share control with the Union Finance Ministry over taxpayers beyond the threshold.

“There can be no forward movement on GST unless the issue of dual control gets sorted,” said a State Finance Minister, adding that if the Centre can come up with an agreeable proposal the indirect tax proposal can be implemented from April 1, 2017.

Meanwhile, a number of States such as West Bengal and Kerala as well as those ruled by the Congress are understood to be hardening their stance over demonetisation of ₹500 and ₹1,000 currency notes and its impact on the economy.

In the last meeting of the GST Council on December 23, some of these States had also sought higher compensation for revenue loss on the grounds that demonetisation had hurt their tax collections. However, Jaitley had said that the compensation would only be for the revenue loss directly attributable to GST.

The issue of dual control and cross-empowerment was not taken up for discussion in the last meeting. The Council had approved the primary drafts of Centre and State GST Bills.

Published on January 02, 2017

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