GST timeline derailed, but direction unchanged
New Delhi: The eight meeting of the GST Council ended on Wednesday without taking up the issue of sharing of administrative powers between the states and the Centre though both sides made headway on the integrated GST bill.
States, including Kerala, Delhi, West Bengal, Karnataka, Meghalaya and Tamil Nadu, also raised a new issue of a rate split under the Goods and Services Tax (GST). Instead of equally dividing the GST tax rate, states are now demanding that the split in the tax rate should be in the ratio of 60:40.
This means that if the highest tax rate under GST is 28%, then states are demanding that SGST rate should be 60% of 28%, and the CGST rate be 40% of 28%.
GST is now unlikely to be implemented from 1 April 2017 with the new rollout date expected to be either 1 June or 1 July.
The next meeting of the GST Council will take place on 16 January, wherein the issue of sharing of administrative powers will be discussed, said Kerala finance minister Thomas Isaac.
“The Centre seems to be in a mood to reconsider some of the stands it is adopting. It is appreciating the position of the states—be it our concerns on compensation or reconsidering it’s stand on the issue of territorial waters ,” Isaac said in a press conference expressing hope that the next meeting of the Council could find a solution to the issue of sharing of administrative powers between the Centre and the states.
The states and the Centre also agreed that the language of the draft compensation bill will be tweaked to provide compensation to states from the proceeds of the cess as well as other sources as decided by the GST Council.