New Delhi: For the second time in as many weeks, the Centre and states today failed to reach a consensus on who will control which set of assessees under GST, a disagreement that threatens to derail the April 1 target for rollout of the new indirect tax regime. After nailing a four-tier rate structure of 5, 12, 18 and 28 per cent, the second-day of the all-powerful GST Council failed to reach a consensus over which category of assessees should be governed by the Centre and which by states.
The November 9-10 meeting of the Council has been called off. It was to finalise the draft law and supporting legislations for subsuming an array of central and state levies including excise duty, service tax and VAT. The finance ministers of states will now meet informally on November 20 to evolve a political consensus on the sticky issue. The next meeting of the GST Council, headed by Finance Minister Arun Jaitley, has been scheduled for November 24-25.
Jaitley, who had previously stated that he hoped for all modalities for the GST to be finalised by November 22, was still hopeful of getting the supporting legislations during the ensuing Winter Session of Parliament from November 16. “That’s the effort. I am endeavouring to do that,” he said when asked if the CGST and IGST legislations will come before Parliament in the upcoming session. “When in the month of August we passed the Constitution amendment, it appeared too challenging because the time was very short. As of today, I am more confident than I was in August. Let me say this because bulk of the spade work has been done. Most of the decisions have been taken. Only one key decision remains,” he said.
Differences on the issue of cross empowerment to avoid dual control arose with states demanding control over 11 lakh service tax assessees, and Centre proposing to do away states having exclusive control over all dealers up to an annual revenue threshold of Rs 1.5 crore — an issue which was settled in the first meeting of the GST Council. No decision could be arrived at the end of the third meeting of the Council on October 19.