GST roll-out: One nation, one tax, 1 April...not sure

  • Timsy Jaipuria and Mahua Venkatesh, Hindustan Times, New Delhi
  • Updated: Aug 04, 2016 19:03 IST
The Goods and Services Tax (GST) will replace a patchwork of central and state levies on goods and services and is one of Prime Minister Narendra Modi's biggest reforms since taking power in May 2014 . (AFP)

As India talks about the biggest indirect tax reform since Independence -- the goods and services tax (GST), the key issue now is whether the government will meet the deadline of April 1, 2017, for rolling it out.

Calling the deadline, a stiff target, finance minister Arun Jaitley said “I think we are going to try to make it as reasonably quick as possible. Now which is 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.” Revenue secretary, Hasmukh Adhia remained non-committal and said that the government is working hard to achieve the deadline. While talking about the roadmap for implementing GST, the revenue secretary said that the onus is now on the GST council, “We are prepared with the IT backbone of GST, but otherwise the implementation will depend on the GST council. Meeting the deadline will depend largely on how long the states take to come to a consensus”.

While the bill to amend the constitution and pave the way for GST has been passed, the most contentious issue of the rate, is yet to be decided. And as usual there is no consensus among political parties on the matter.

The finance minister’s chief economic advisor, Arvind Subramanian echoed the same sentiments and stayed away from committing to a deadline. “It is a challenging deadline”, he said.

Government officials feel that the real battle to bring implement GST begins now.

“Passing of GST bill: This is only end of a beginning. The real hard work starts now,” tweeted revenue secretary Hasmukh Adhia.

Some of the major milestones which now need to be covered before April 1, 2017 are: First, 50% of the States will have to ratify the Bill followed by the assent of the President. After which, the GST council will be constituted, which will deliberate upon the various rates of GST.

Then, GST legislations such as the Central GST law, Integrated GST law and 29 State GST laws including allied rules and notifications would also need to be passed by the relevant legislative bodies.

During this process, there would also be a need for a substantial engagement with the industry bodies, traders, service providers and almost every local trade bodies and associations for the training and the acceptance of the new tax regime.

A lot of these milestones would require a lot of time, patience and constant deliberations both at the state and central government level, only then can GST be implemented.

Little wonder that the head of the empowered committee of finance ministers and West Bengal finance minister, Amit Mitra avoids any direct answer to the question of when GST will be rolled out. He only says, “There is a lot of work that still remains”.

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