Centre To Miss 1st April Deadline On GST?

Amid the Demonetization cloud still hovering over the Indian Financial Sky, it looks like the centre is likely to miss the self-imposed deadline of 1^st April, 2017 to roll out the Goods and Services Tax (GST) even as the GST Council on Thursday talked of reaching a “broad consensus” on the draft central law or Central GST.

Sources familiar with the development said that “four-five” issues were left out as they require more discussions. According to a state finance minister these issues have seen differences between the centre and the states and have been put on the back burner. They will now be taken up only in the January meeting of the council.

On the first day of the two-day meet of state finance ministers chaired by Union Finance Minister Arun Jaitley, the council cleared most of 197 clauses of the CGST.

Till date, the GST Council has met seven times however the issue of “who will have jurisdiction over different segments of assessees” under the proposed GST regime continue to divide the centre and the states.

On Friday, 23^rd December 2016, the council would take up the contentious issue of empowering the centre as well as states – also called Cross Empowerment – to avoid the dual control over assesses in the new indirect tax regime.

Another area of disagreement is the integrated GST or IGST law that deals with taxing inter-state movement of goods and services. Right now, the model law does not provide for any important role for the states in enforcing it.

Parliament amended the constitution of introduction of the GST but there has not been any consensus on these issues in the earlier meetings of the council.

The subsequent GST bills – CGST, IGST as well as compensation law – could not be introduced in the winter session of the parliament and now chances are that 1^st April, 2017 deadline cannot be maintained. But the constitutional amendment makes it a mandate to have the new indirect tax regime by 16^th September, 2017.

Finance Minister Arun Jaitley said last Saturday while addressing the annual general meeting of industry body, FICCI that one does not have the luxury of time. If one doesn’t implement in 1^st April, you only have five more months. The sooner it is implemented, the better.

Indian markets and sectors to be effected by the GST are waiting eagerly for any concrete news as to when it would be implemented. The point of concern is that how Nifty share price will react on the back of this new development.