Goods and Service Tax – Nearly a reality?
Ranjeet Mahtani and Sweta Rajan
The Goods and Service Tax Council met on 18th February, 2017. The agenda primarily was to finalise the draft GST laws. Some of the key points which were expected to be discussed and finalised were:
(1) the critical anti-profiteering clause in the draft GST legislations which ensures that the benefit of lower taxes gets shared with consumers
(2) the constitution of a 'national goods and services tax appellate tribunal' to adjudicate on disputes
(3) the powers of the Comptroller and Auditor General (CAG) for GST audit – for which the CAG had raised a requirement
(4) draft GST Compensation Bill – to compensate States for the losses which may arise as a result of transition to GST.
However, since some States asked for deletion of certain portions in the minutes of the previous meeting, time was spent in discussing the same, and only the anti-profiteering clause and the draft GST Compensation Bill were finalised. As regards the anti-profiteering clause, the final text is awaited. There were comments that a threshold should be prescribed and powers of the Government limited. It remains to be seen how this has been addressed.
The Parliamentary Affairs Minister had earlier stated that the Government is hopeful that the Central GST and Integrated GST draft legislations will get approved by the Council during this meeting, to table them before the Parliament, along with the GST Compensation Bill, during the next phase of the budget session commencing on 9th March, 2017. Further, the Union Minister of State for Finance and Corporate Affairs stated that there is no major hurdle to roll out GST by 1st July, 2017, since States have been co-operating and the required procedures can be completed in time.
Before the start of this meeting, the GST Council was on course to finalise the draft laws, and handover the baton of making GST in India a reality, to the Parliament. However, this handover has been postponed and will be determined during the Council’s next meeting on 4th and 5th March, 2017.