GST council fails to break deadlock on dual control, next meet on January 3,4

Uncertainty over the contentious issue of cross empowerment and dual control continued to loom even as the two-day Goods and Service Tax meet ended on Friday. 

Speaking to the media, Finance Minister Arun Jaitley said that the primary draft of Central Goods and Service Tax (CGST) and State Goods and Service Tax (SGST) have been approved. He touted that once both the drafts are passed by the parliament and state legislatures respectively, they will be a mirror image of each other. 

Commenting on the compensation law, the Finance Minister said it is clear that the state will be compensated to the extent of 100% of loss directly attributed to a period of five years. "Compensation to states for loss of revenue from roll out of GST to be paid every two months" said Jaitley. He further stated that the legally vetted draft of law for compensation to states will be placed before the GST Council at the next meeting. 

On the Integrated Goods and Service Tax (IGST) law, Jaitley said that the definition of the territory of state itself needs to be cleared as it is a matter of constitutional interpretation. The council further needs to clarify whether the IGST power are under the purview of the central government or can be shared. He directly linked the issue of IGST to the division of control between cross empowerment and dual authority. 

Jaitley announced that the GST council will meet on January 3 and 4 to discuss the issues of IGST, dual empowerment and the legally vetted language of compensation law.