April 1 stiff target for GST rollout, but efforts are on: Arun Jaitley
The April 1, 2017 deadline for the implementation of the goods and services tax (GST), India’s biggest tax reform since Independence, is a “stiff target”, finance minister Arun Jaitley said on Thursday.business Updated: Aug 04, 2016 23:24 IST
The April 1, 2017 deadline for the implementation of the goods and services tax (GST), India’s biggest tax reform since Independence, is a “stiff target”, finance minister Arun Jaitley said on Thursday.
Making no commitment on the rollout date, Jaitley told a press conference, “I think we are going to try to make it as reasonably quick as possible. Now, what’s the date by which we are able to make it will have to be seen. It is always good to set stiff targets and try and meet them rather than have no targets at all.”
His remarks came a day after Rajya Sabha passed a bill to amend the Constitution, paving the way for the reform that aims to replace various local and central taxes with a single tax. The bill now needs to be passed by Lok Sabha and then ratified by at least 15 states.
Revenue secretary Hasmukh Adhia said the government was doing its best to meet the deadline. “We are prepared with the IT but the implementation of GST by April 1, 2017 will depend on the GST council and the time the states take to come to a consensus,” he told HT.
He said the government was holding regular meetings with public sector banks, which were “prepared for the rollout”.
Adhia said certain inflationary items will be kept out of the ambit of the new tax structure.
Political parties, however, are still divided on a key factor — the GST rate.
Crucial for GST rollout, Jaitley said an “optimal” rate of taxation would be ideal, but the final decision will be taken by the GST council, which is made up of representatives of the Centre and states. The council will “draw a balance” between revenue requirements and the need to keep tax rates low for the common man, he said.
The government wants the GST council to decide on the rate in the next two months. “But there is a possibility more time may be required in arriving at a consensus,” said an analyst.
According to a roadmap unveiled by Adhia, “within the next 30 days, we expect 50% of the states (around 16) to approve the Constitution Amendment Bill”.
The real work begins now, he said. Both Houses of Parliament will have to approve the GST bill — an enabling legislation — in the winter session and technology for the rollout will have to be put in place.
He said the immediate challenge for the government was calculating the revenue base of the Centre and states, and the former’s compensation requirements. A list of exemptions will also have to be prepared.