The Centre and States continued discussions on Sunday in the hope of reaching a consensus on the Goods and Services Tax, and ensure its roll-out from April 1, 2017.
But it now looks like the subsequent GST laws will be taken up by Parliament and State Assemblies only during the Budget Session next year.
“We have started discussions on the draft GST Bills on Centre and integrated GST. There were some provisions that need redrafting, which will be done,” Finance Minister Arun Jaitley said after the first day of discussions of the GST Council meeting, adding that the discussions have been satisfactory.
It will meet again on December 22 and 23, when it will take up the draft Bills and the tricky issue of jurisdiction over businesses. Sources said that there was a clause-by-clause discussion of the draft model Bills on Sunday.
This will, however, mean that the model GST Bills will not be introduced in Parliament in the ongoing Winter Session although Jaitley stressed that the target of April 1, 2017, is still on.
The Bills are likely to be introduced in the Budget Session of Parliament now.
“As and when we finalise all the issues in the council, and there’s a consensus, we will answer the question at that stage. Budget Session starts this time in January,” Jaitley said.
The last round of meetings of the GST Council on December 2 and 3 failed to break the stalemate, and discussions were overtaken by the concerns of States on the demonetisation of high-value currency and its economic impact.
The timely roll-out of the indirect tax reform is also under a cloud with protests over demonetisation by political parties.
The Centre and the States have also been unable to reach a breakthrough on who will have control over businesses under GST. While the Finance Ministry is keen to maintain control over service taxpayers, States are pushing for dual control.
Further, a number of States, including Kerala, Uttar Pradesh, West Bengal and Tamil Nadu, are also keen on horizontal division of assesses under GST, which would mean that they would have exclusive control over small businesses that have an annual turnover of less than ₹1.5 crore. There would be cross empowerment of officials of the Centre and States beyond this limit.
On the other hand, to ensure ease-of-doing business, the Finance Ministry has proposed vertical division of assessees wherein both the Centre and State will get a fixed number of assessees.
Jaitley, however, said the Centre has worked out various options on the issue to reach a compromise.