The all-powerful goods and services tax (GST) council headed by finance minister Arun Jaitley will hold its ninth meeting on Monday to iron out differences as the government looks set to miss its target rollout date of April 1.
Sources say existing issues – such as dual control of whether the Centre or states would have authority on GST assesses – haven’t been resolved, a new disagreement over taxing high sea-trade cropped up at the last meeting on January 4. This was worrisome especially as time was running out, they added.
Jaitley earlier said that the issue of dual control was complex but added that the council would not resort to voting as that could set a precedent.
With the deadlock continuing over several issues, it is now certain that the government will not be able to roll out the new tax structure – which creates a nationwide market by abolishing local levies -- by April 1.
Sources said that the issue of junking Rs 1000 and Rs 500 notes derailed talks on GST. “We were progressing at a satisfactory pace but the demonetisation issue has completely derailed discussions,” a source who did not wish to be identified told Hindustan Times.
The upcoming elections in five states could further delay the process, sources added.
Once the GST council resolves pending issues, bills relating to the central GST (CGST) and integrated GST will be taken up for Parliament’s approval. “We are hoping that the pending issues will be resolved and the bills can be taken up in the budget session,” an official said. The first phase of the budget session will begin on January 31 and continue till mid February while the second phase is likely to begin on March 9 and end on April 13.
The finance minister has reiterated the need to roll out the GST at the earliest as there was a constitutional compulsion of implementing the new indirect tax structure by September 17, 2017.