The government’s push to roll out the goods and services tax (GST) for a uniform, nationwide market from April received another jolt on Wednesday as a meeting with the states failed to resolve differences.
Even after six meetings, the Centre and states have failed to hammer out each other’s share of administrative power on the 10-million indirect taxpayers. Besides unresolved issues, the states created a new frontline over taxing high sea trade.
Another meeting is called on January 16 to clear the recurring differences so that the government can bring three bills linked to the GST during Parliament’s budget session, which begins on January 31.
“We know the difficulties, we are moving against time,” finance minister Arun Jaitley said.
The government failed to pass bills related to new tax regime, which will do away with most of the subsidiary taxes on goods, during the winter session that was a washout because of the Opposition’s belligerent stand against the shock recall of 500- and 1,000-rupee banknotes in November.
The political atmosphere could remain surcharged when Parliament sits for the budget session.
West Bengal finance minister Amit Mitra, who supported the GST before, gave a hint of things to come as he stormed out of a pre-budget meeting on Wednesday. The state’s ruling Trinamool Congress is angry over the CBI’s arresting two of its Lok Sabha members for their suspected role in ponzi scams.
Mitra alleged there is “a financial emergency and a political environment of fear” in India.
His Kerala counterpart, Thomas Issac, said he was not optimistic about rolling out the GST in June or July. “Working overtime, it should be possible to meet a September deadline.”
The Centre and states squabbled about dual control on business entities with an annual turnover of less than Rs 1.5 crore. The Centre’s proposal to control interstate transfer of goods and services was another bone of contention.
More confusion surfaced now over taxes on high sea trade. Several coastal states demanded they be allowed to continue to levy tax on trade of goods within 12 nautical miles of Indian waters.
But finance minister Jaitley said a “constitutional solution” should be found to resolve this point.
“States’ boundaries do not include the sea, but they have been levying the tax on the sea trade, it is a bone of contention and needs to be resolved at the earliest,” Bipin Sapra, tax partner, EY, told Hindustan Times.