The Centre and states failed to agree on the details of two bills crucial to triggering a Goods and Services Tax (GST) on Saturday, which possibly clouds the roll out of the country’s biggest tax reform from July.
The GST Council, headed by Union finance minister Arun Jaitley and represented by state finance ministers, will meet again on March 4 and 5 to finalise the two bills so that they can be introduced in Parliament during the second half of the Budget session starting from March 9.
The two legislation – the Central GST and Integrated GST bills – deal with the Centre’s powers to replace excise duty and service tax with the GST.
Saturday’s meeting, however, saw the stakeholders agree on a third bill that guarantees compensation to states in case of any revenue loss from the introduction of GST.
“The draft Compensation Bill has been approved in the GST Council meeting. On March 4-5, the legally vetted drafts for all important bills will be presented to the Council,” Jaitley said after the 10th GST Council meeting.
“We will require one major meeting after March 4-5 to give approval to those specific items in relation to each of the slabs.”
{{/usCountry}}“We will require one major meeting after March 4-5 to give approval to those specific items in relation to each of the slabs.”
{{/usCountry}}Read| GST Council clears draft compensation law, says FM Arun Jaitley
While there was apprehension that the Council may approve a tough anti-profiteering clause in the GST bills, Jaitley said: “We did not discuss the anti-profiteering clause in this GST Council meeting.”
The Narendra Modi government is eager to implement the GST, which has already missed several deadlines because of lack of political consensus.
The proposed tax regime will create a unified, common market that will help lower the tax burden, shore up revenues of the Centre and states, temper inflation and step up economic growth by 1-2 percentage points in the medium term, analysts say.
Jaitley earlier indicated that the GST roll out might be deferred to July against an earlier deadline of April, 2017.