GST rollout may miss deadline as govt, states spar

New Delhi: With the Centre and states failing to sort out the contentious issue of dual control of assesses at the 6th GST Council meet called by the finance minister on Sunday, rollout of the single-tax regime from April 1 next year now looks virtually impossible.

GST enabling legislations are unlikely to be introduced in the current session of Parliament as the GST Council meet has now been deferred to December 22 and 23.

The all-powerful GST Council was to decide on the model of dual control of assesses — clearly dividing the administrative, auditing and assessing powers between the Centre and state governments, especially with regard to who will assess small traders and services — but the two-day meeting was curtailed to half a day and even then the crucial issues couldn’t be discussed.

Almost all the time on Sunday was spent in going over, clause by clause, of the voluminous GST draft legislations.

With serious differences between the Centre and states as to who will assess small traders and services under GST persisting, GST legislations — CGST, IGST and compensation law — are unlikely to be introduced in the ongoing session of Parliament which ends on December 16.

Asked if the delay would derail the process, Union finance minister Arun Jaitley said this time the Budget session will begin from January.

States like Kerala and Tamil Nadu said that meeting the April deadline was not possible and GST could be rolled out from September 2017.

“In the draft legislation there are about 195 Sections. So it is the core bill of the legislation. We discussed 99 Sections and a few clauses need to be redrafted. We would change that during the course of time. Hopefully, in the next meeting we would be able to clear the legislation part,” said Mr Jaitley.

He, however, added said that the Centre stands by the April 1, 2017, target of implementing the GST. “We do not have the discretion of time. By September 16, 2017, the curtains will draw on the old taxation rules,” he said. “Hopefully, in the next meeting we would be able to clear the legislation part. We will take up legislation and possibly the cross empowerment issue if time permits,” Mr Jaitley said.

Kerala finance minister Thomas Isaac said demonetisation has eroded states’ trust. “April 1 deadline is out of picture, GST can be rolled out only by September”. Tamil Nadu also said that April 1 target was not possible. “Too many sections of law yet to be finalised, GST can’t happen without consensus on dual control,” Tamil Nadu finance minister said after the meeting.