New Delhi: Negotiations over the one-nation-one-tax GST remained stuck on the issue of control of tax payers even as the GST Council made headway in approving most of the clauses of supporting legislations on Friday. With this, the April 1 rollout target looks virtually impossible.
The GST Council tweaked the compensation mechanism to allow bi-monthly payment to states instead of the quarterly payout as previously decided. The issue of dual control and the all important Integrated GST legislation, which has been hanging fire, will be taken up at the next meeting on January 3-4.
Finance minister Arun Jaitley told the media after the 7th GST Council meeting that the Central GST and State GST, which are mirror images, were cleared along with compensation law.
“If you ask me what are the principle residuary items left, the main item of course is the IGST and dual empowerment issue. The second is the legally vetted language which will be placed in the next meeting on January 3-4,” Mr Jaitley said. The Council will take up items in each tax bracket after that.
While the compensation was earlier proposed to flow from the cess to be levied on luxury cars and sin goods like tobacco, demonetisation had led states to believe that more of them would need support to make up for the revenue loss arising from GST rollout.
It was previously thought that 4-5 states would need compensation. With economic activity being impacted by demonetisation, it appeared that more states would need support because of loss in tax revenues.
