As consensus eludes, unlikely GST rollout on April 1, 2017

With the failure of deciding on laws, the speculations are that since government won't be able to table law in Winter session, the laws will be tabled in Budget Session in January.

As consensus eludes, unlikely GST rollout on April 1, 2017

In what appears to be a failed attempt of finalizing Goods and Service Tax laws, the Centre and States have now decided to meet on December 22 and 23 to hammer out a consensus.

This step quashed the hopes that the crucial bills would be introduced in the ongoing winter session of Parliament and making it tough to meet the April 1 rollout date for the GST across the country.

Reportedly, the meeting was planned for two days but ended on first day itself i.e. Sunday. Finance minister Arun Jaitley informed that some states had urged that Monday's meeting be deferred as it was a holiday due to Eid-e-Milad and the council agreed to meet later in December.


"Today we had a discussion which was exclusively on the legislative drafting. So bulk of the critical provision we have approved today," Jaitley told media after the meeting. "There is one section which needs to be redrafted...one cross empowerment issue which we are leaving aside and therefore the discussion on the legislation and its approval each section is moving satisfactorily. And hopefully in the next meeting we would be able to clear it," he said.

The elephant in the room for Centre and States is the issue of administrative control after implementation of GST.

"Well, that issue did not co me up for discussion today because today's agenda was taken up exclusively by the legislation and that's an issue which is still flagged and still pending. I have various options ready for discussion and as and when it is discussed we will place those options before the council," Jaitley said when asked whether the issue of dual control was discussed.

After the Centre's sudden and much-criticized decision of demonetisation, politics seems to have intruded with states like West Bengal arguing that the decision to scrap some high-value notes will impact GST revenues. Tamil Nadu, Kerala and Bihar have also sought administrative control over both goods and services below the Rs 1.5 crore threshold.

Further on the issue of rollout of GST, Jaitley said that government still stands by the April 1 rollout date, as its one of the key reform priorities. "I told you after the last meeting also our target is the 1st of April. The luxury of time is not available to us for the simple reason that if 1st April is the first possible day it can be implemented, then the last date also is constitutionally defined as 16th of September 2017," the Minister said.
"So the discretion as to when to implement is only five months and 16 days and that's why we don't have the luxury of time because after five months the curtains will be down on the old taxation powers," he said pointing to the need to implement the tax reform measure within the defined dates.



With the failure of deciding on laws, the speculations are that since government won't be able to table law in Winter session, the laws will be tabled in Budget Session in January. However, Jaitley refused to answer about this.



According to the reports, tax experts said the April 1 GST rollout deadline will be missed. "It's unfortunate that there was not much headway in the Council meeting. The only silver lining was that substantial progress seems to have been made on discussions with respect to laws and broad consensus was reached for provisions up to Chapter 20 (out of total 27 chapters)," said Pratik Jain, partner and leader indirect tax, at consultancy firm PwC.