Printing notes a time-consuming exercise, RBI calibrating its release: Jaitley

Ahead of the GST Council's two-day meeting beginning on Friday, Finance Minister Arun Jaitley talked about the new Good & Service Tax regime and the recent demonetization move by the central government. "GST and demonetization together will be a game changer. Investors will be wary of some states seen on wrong side of reforms," Jaitley said on Friday.

The Finance Minister also said that the Constitution did not provide for delay in GST and that there was a constitutional compulsion to have GST before September 16, 2017. "Constitution Amendment notified on Sep 16, 2016 says existing indirect tax regime can run for year, any delay would mean there will be no taxation from Sep 17, 2017, " Jaitley said.

The all-powerful GST Council at its two-day meeting beginning 3pm on Friday will dwell on the issue of jurisdiction over assessees and draft model laws for implementation of the new GST regime from April next year.

On demonetization, the Finance Minister said that the security printing of currency was a time-consuming exercise and that the RBI calibrating release of currency. "Some disruption is bound to be created due to switchover but long term advantages are huge,"  Jaitley said.

On the move's impact on trade, Jaitley said, "The volume of trade, business will grow but size of paper currency will shrink. The country has welcomed demonetization. It's difficult to estimate disruption in this quarter, it does have impact but will not last long. India is likely to continue to be fastest growing major economy in world like last year.

He added that, a year from now, India will be a larger economy with higher GDP, cleaner GDP and a reasonable interest rate. 

The GST Council, which has Union Finance Minister and state representatives as members, will finalise the model Goods and Services Tax (GST) law, Integrated GST (IGST) law and compensation law at their meeting. The finalisation of these laws, on which the Centre had 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.

The Council is also likely to take up the vexed issue of cross empowerment of states and the Centre to avoid dual control -- an issue which has remained a contentious one during the previous two GST Council meetings.

The government hopes to implement GST from April 1 next year and for that to happen, the supporting legislations have to be ratified by Parliament in the ongoing session.

At its last meeting, the 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 GST compensation law provides that states will receive provisional compensation from the Centre for loss of revenue from implementation of GST every quarter, but the final annual number will be decided after an audit carried out by CAG.