Rollout of GST from April 1 under a cloud

Our Bureau New Delhi | Updated on January 16, 2018 Published on December 23, 2016



Council clears CGST and IGST Bills; dual control to be taken up in next meeting

Doubts about an April 1, 2017 rollout of India’s most ambitious indirect tax reform were revived on Friday as the Goods and Services Tax (GST) Council failed to make substantial progress at its discussions.

The issue of dual control was not taken up by the Council, although the two-day meeting approved the primary draft of the Centre and State GST Bills.

“We are trying our best to meet the April 1, 2017, deadline,” said Finance Minister Arun Jaitley, after the seventh round of the Council concluded.

A number of State Ministers are understood to have sought a review of the planned rollout of GST from April and have instead called for its implementation from July 1.

The timeline for placing the Bills before Parliament and State Assemblies will be decided by the GST Council “once we cross all the bridges”, Jaitley said.

The issue of dual control and cross-empowerment through deliberations has proved particularly contentious between the Centre and the States.

“There is only one law and two bureaucracies, so the question is about how the jurisdiction will be divided for audit management,” he said.

Demonetisation impact

The impact of demonetisation on revenue collections by the States, and the compensation by the Centre, are also understood to have been discussed at the meeting.

The Council approved the basic draft compensation law, but a clause on the “source of compensation” has to be redrafted. Jaitley, who chairs the Council, said it would be taken up at the next meeting.

It was also decided that the Centre would pay compensation to the States every two months as against the earlier provision of quarterly payments.

Jaitley, however, refuted concerns of some States such as West Bengal and Tamil Nadu that the demonetisation of ₹500 and ₹1,000 notes had impacted the revenue estimates of most States.

“States will be compensated 100 per cent of the loss that is directly attributable to GST implementation for a period of five years,” Jaitley stressed.

The Centre and the States had earlier agreed to a compensation package of ₹55,000 crore for losses arising out of the GST regime.

The next round of meetings will be held on January 3 and 4; the draft of the model Integrated GST (IGST) Bill and the thorny issue of cross-empowerment will be taken up.

The legally vetted draft of the law for compensation to the States will also be placed before the next meeting.

Jaitley will also hold pre-Budget consultations with State Finance Ministers during the next meetings.

Published on December 23, 2016

A letter from the Editor

Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.