Why GST needs a Christmas miracle in times of demonetisation
On Sunday, finance minister Arun Jaitley held the sixth marathon meeting with the council of states to roll out the Goods and Services Tax (GST). While the government is working towards the April 1 deadline, it will need a Christmas miracle to meet it.
In the shadow of the demonetisation drive, the political fallout has clearly divided camps. States adopting a stringent line in Parliament have made it clear that GST is the new political blackmail tool for them.
“Shouldn’t we first rethink about demonetisation, and then go for GST?” asked Amit Mitra, chairman of the empowered committee of state finance ministers.
Tamil Nadu and Kerala too joined the chorus at the GST Council meet, claiming that finer points on the tax need to be thrashed out. On the face of it, dual control remains the sticking point.
States want exclusive control on businesses with turnover below Rs 1.5 crore. But the Centre wants to share the control over taxpayers in goods in all segments.
Currently, there are three GST Bills pending in the Winter session of Parliament, but it seems highly unlikely they will be passed now. While the government has to ensure that the new GST law notified this year on September 16 has to be in place within 12 months, it may adopt a stick approach if the states don’t fall in line.
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| The next GST Council meeting, headed by Arun Jaitley, is schedule for December 22 and 23. (Photo: India Today) |
“We will have a consensus on the dual control issue. The states don’t have any choice. The GST has to come into effect by September 2017, so if they don’t agree, there is always voting,” Arjun Meghwal, MoS, finance, told India Today.
Interestingly, the Centre could be taking the money Bill route to counter Opposition reluctance in Parliament for GST Bills, but a consensus with the states is necessary for seamless rollout across the nation.
The next GST Council meet, headed by Arun Jaitley, is schedule for December 22 and 23. The council has passed 99 of 195 clauses, but a consensus is still elusive.
But with the Budget session beginning earlier next year and slowdown fears looming large, this indirect tax amendment is even more imperative.
“Demonetisation derailed mutual trust, has toppled the GST plan for April 1,” said Thomas Isaac, finance minister of Kerala.