The fifth meeting of the Goods and Services Tax (GST) Council will deliberate on the dual control issue on Saturday and also discuss the impact of demonetization on revenue.
Consensus eluded on the model GST law on Day 1 of the meeting of the all-powerful GST Council, which will deliberate again, on Saturday, the issue and also try to resolve the contentious point of dual control of assessees under the new indirect tax regime.
The fifth meeting of the Goods and Services Tax (GST) Council, headed by Union Finance Minister Arun Jaitley and comprising state finance ministers, will also deliberate on impact of demonetization on revenue. The Centre plans to implement the GST from April 1. Due to Constitutional compulsion, the GST has to be rolled out by September 16 next year as the existing indirect taxes will come to an end, and it would not be possible for either Centre or the states to collect indirect taxes.
Some state finance minister exuded confidence that it was still possible to implement GST from April 1, 2017, though the Centre is running on a tight time schedule. "On dual control there is no consensus so far. It will be taken up tomorrow," Jammu and Kashmir finance minister Haseeb Drabu told reporters after the meeting, and also expressed hope that April 1 target for the GST roll out is possible. He said the finance ministers discussed State GST law and in tomorrow's meeting "we would be able to clear large chunks of model GST law".
Kerala Finance Minister Thomas Isaac said that the meeting was inconclusive as "we had to spend nearly two hours to decide upon the agenda itself". "Many states wanted the cross empowerment agenda to be taken up first but officially it was the agenda that GST law should to be taken first. So lot of debate time was spent on this...," he said. The GST Council has to finalise the model GST law, Integrated GST (IGST) law and compensation law at their meeting tomorrow.
At its last meeting, the GST Council agreed on a four-slab structure 5, 12, 18 and 28 per cent along with a cess on luxury and 'sin' goods such as tobacco.
The Kerala minister further said that states are "unwilling" to agree to the top-down vertical division of assesses under GST.
When asked if GST could be brought in from April 1, Isaac said, "it is still possible if a compromise is reached upon the administrative aspects of the GST".
To a question on if he thinks all issues would be resolved tomorrow, the Kerala minister said, "that's very unlikely".
"IGST will be discussed separately, compensation law will be discussed separately and within this general GST law, we will have to be define how the tax is going to be collected...," Isaac added.
The finalisation of Model GST, IGST and compensation laws, on which the Centre last week invited public comments, by the Council will pave the way for their introduction in the ongoing Winter Session of Parliament, which ends on December 16.
Talking to reporters, Haryana finance minister Abhimanyu said: "We are converging on most of the issues so far and we hope to conclude with the draft tomorrow and also take up dual control".
Telangana finance minister said three chapters of SGST was discussed in the meeting.
Union finance minister Jaitley had called for an informal meeting with his state counterparts on November 20 to thrash out a political solution, but the meet failed to arrive at a common ground on how the Centre and states will control assessees under the new regime that will subsume an array of taxes such as excise duty and service tax as well as VAT.
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