GST Can be Deferred upto June-July 2017
The GST Council met for the 6th time on 11th December 2016. However, the consecutive day meeting on 12th December was postponed due to holiday of Eid.
GST Council Meeting’s Conclusion
The GST Council discussed the revised draft GST Act,2016 on 11th December 2016. It literally carried out legal vetting of proposed sections of revised draft GST Act,2016.
It has discussed almost 50% of the revised draft GST Act,2016 i.e 21 chapters out of 27 chapters(up to Section 99 out of 197 Sections).
It is pertinent to note that the revised draft GST Act,2016 was released for the first time by GST Council Secretariat after its constitution on 12th September,2016 in terms of Article 279A of the amended Constitution of India.
Finance Minister after the Council’s meeting has briefed that
Bulk of the critical provisions we have approved today. There is one section which needs to redrafted.Therefore, the discussion on legislation and its approval of each section is moving quite satisfactorily and hopefully in the next meeting we will be able to clear it.
Bone of Contention in GST Council
The States of West Bengal, Kerala and Tamil Nadu are demanding exclusive control over all the traders with threshold turnover upto Rs1.5 crore.
But, this will leave very small numbers of traders under the control of the Central Government.Therefore, this is considered to be the major hurdle to proceed further.
Proposal for Traders Upto Rs 1.5 Crores
The Central Government in turn has come up with the following proposals:
a. dividing traders in a fixed proportion between the centre and the states irrespective of a threshold or
b. only dividing the traders who are likely to be audited in a GST regime.
What is Constitutional Deadline for GST
The Finance Minister, after the meeting, has categorically shared his concern on the constitutional deadline for GST
Our target is the first of April, we stand by our target. The luxury of time is not available to us for the simple reason that if April 1 is the first possible day when it can be implemented then the last day is also constitutionally defined (as) 16th of September 2017,”
So the discretion as to when to implement it is only 5 months and 16 days… After 5 months and 16 days, the curtains will go down on the old taxation powers.
Next Meeting of GST Council
The next GST Council meeting is scheduled on 22 and 23 December,2016. It will discuss from Section 100 onwards of the revised draft GST Act,2016.
Additionally, only one clause on coercive powers will be redrafted and proposed in next meeting.
Once, the CGST & SGST bills are over . The GST Council will take up IGST bill. This will again give rise to the hurdle of sharing of administrative powers between the centre and the states .
GST is a sure tax. Therefore,the GST will be implemented in india in 2017. However, the time of its implementation may be deferred upto June or July 2017.
Since, the Central Government will not again take risk for any further delay after July 2017 as any time thereafter will be dangerous. In any case, if GST is not implemented upto16th September2017 , then from 17th September 2016 India cannot think of no indiect tax zone as existing old provisions will have no applicability .