New Delhi: The GST Council on Friday approved compensation to states for any revenue loss post-GST rollout, and most of Central-GST and State-GST legislations, but once again skipped the controversial issue on who will audit tax payers under the new tax regime.
The control of tax payers among the states and the Centre is one of the crucial issue holding up the roll out of GST. Integrated GST (IGST) and dual control which are related, will now be discussed in another meeting on January 3-4.
The draft compensation law which has been approved by GST council will need only to be passed by the Parliament.
“The basic draft (compensation law) of that has been approved. There was one clause in particular about the source of the compensation fund of which language will be redrafted and the legally vetted language will be placed before the next meeting of Council,” said Union finance minister Arun Jaitley after the GST meeting.
It was decided on Friday that the states will be compensated for any revenue loss after GST roll out after every two months.
Central GST to be approved by Parliament and State GST by state assemblies. GST council has agreed on most of the provisions of CGST and SGST expect “few clauses” related to dual control. These two laws will also be drafted in legal language and will be presented for approved at the next meeting.
“If you ask me what are the principle residuary items left, the main item of course is the IGST and dual empowerment issue. The second is the legally vetted language which will be placed in the next meeting on January 3-4,” said Mr Jaitley.
“I am trying my best,” he said, when asked about the April 1 rollout schedule. “I am not going to bind myself with anything. Our effort is to do it as quickly as possible and I think we are making a reasonable headway.”
West Bengal finance minister Amit Mitra said initially the plan was to create a '55,000 crore compensation fund, but post demonetisation situation has changed completely.
“Most states feel that their revenues will drastically fall in third and fourth quarters,” Mr Mitra said.
This would necessitate support to even more states because of loss in tax revenues. Due to this, the ‘source of compensation fund’ part of the compensation law is being redrafted to say that compensation amount would be raised from cess and ‘any other taxes as the GST Council decides’, said sources.
