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GST Council To Meet On Tuesday To Break Deadlock Over IGST And Other Issues

GST Council To Meet On Tuesday To Break Deadlock Over IGST And Other Issues

Even as the prospects of the Goods and Services Tax or GST getting enacted by April 2017 are quiet bleak, Finance Minister Arun Jaitley will be trying hard to convince the council to resolve all issues related to the dual control in tomorrow's meeting of the stakeholders. The GST council will try to resolve the many contentious issues over the next two days.

The GST council has had 7 meetings so far and has cleared as many as 20 chapters of the model GST law. But, Mr Jaitley has been unable to break the deadlock on the most crucial issue- the Interstate GST or (IGST) law- that concerns who will have a bigger say on goods and services that are sold between two or more states.

The GST council which has representation from all the states in the country has also expressed reservations on the Centre's demand to get the powers to tax small tax payers, who earn less than Rs 1.5 crore in annual revenue, for both goods and services.

Most non-BJP states are also peeved at the central government's move to demonetise 86 per cent of the Indian currency that lead to slow down in the manufacturing sectors of the economy.

Before demonetisation, the states had agreed on the proposition of getting compensated for any loss of revenue due to GST in the first five years from a cess kitty of Rs 55,000 crore. But, due to demonetisation, states expect a bigger loss in their revenues as the manufacturing activity takes a beating in the coming months. This has lead to demand for increase in the projected compensation for states.

In August 2016, Parliament had passed the GST Constitutional Bill, paving way for the centralised tax regime to be enacted by April 2017. However, the GST law negotiations between the Centre and the states have extended beyond the winter session of the parliament, leading to critics casting doubt over the practicality of having the law enacted any time before July this year.