Model GST Law discussed by GST Council although GST gets postponed

GST Council concluded its meeting yesterday without any consensus on the dual control under GST. There is still a stumble block of the administrative powers centre and state governments are going to hold. After resolving the compensation issues, states are not ready to withdraw their control upon the taxpayers. Earlier it was decided that states will have sole control upon the taxpayers having aggregate turnover up to Rs. 1.5 crores and above that both centre and state will have dual control in case of goods. But for services it was decided that all the taxpayers shall remain under the control of central government.

Next meeting on this issue has been planned on 11^th and 12^th December. Even if breakthrough is obtained in this meeting, winter session will get over in next 3 days i.e. 15.12.2016. In such a scenario it does not look like that government will be able to get the bill passed so quickly. Even if it brings these bills as money bill, 14 days time have to be given to Rajya Sabha as well. It is most likely that GST Bills will get passed in the budget session next year. GST is actually going through the test of federal setup.

Apart from the dual control issue, GST Council discussed 9 out of 27 chapters of CGST/SGST law, majority of which were accepted by consensus. It looks like there shall be no issues with the drafting of the law, but the big question regarding the dual control is still to be answered. Also states apprehended that due to demonetization they are likely to face losses on the 3^rd Quarter of FY 2016-17 and hence the same should be compensated by some means.

Looking at the issues one after the another, April 2017 is certainly not the date when we can expect the biggest indirect tax reform to roll out. It is certainly going to get postponed by one Quarter or even more.

by:

Keshav R Garg

(B.Com, FCA, CS, ISA (ICAI))

Faculty for GST: Indirect Tax Committee of ICAI

Author: Bharat's GST Ready Reckoner

A Handbook on GST

Adviser for GST: Industries Association of Chandigarh

Member: Indirect Tax Committee of CII, PHDCCI, MyGst.MyTax Foundation

Address: 3328, Sector 27 D, Chandigarh, India - 160 019

Phones: +91-172-461-3328, +91-98880-90008

Mails: mygst.mytax@gmail.com, keshavgarg@kdai.in

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