GST discussions deadlocked over tax right on below Rs 1.5 crore group

The fifth meeting of the GST Council has ended without agreeing on critical legislations required to rollout the tax reform on April 1, 2017.

Practically, the fifth meeting of the Council was influenced by demonetization and both sides failed to agree on all the supporting legislations. Especially, decision about the sharing of administrative powers between the centre and the states remained unsolved.

The Council has decided to conduct its next meeting between 11-12 of this month. If the tax reform is to be implemented with the next budget, the next Council meeting became very crucial as the general budget is pre-scheduled to early February.

“Nine chapters each of the Central GST and the state GST law have been discussed and locked down. We are meeting again next week to finalize these legislations as well as the compensation bill and the integrated GST bill,” Finance Minister Arun Jaitely briefed about the meeting.  

One critical area where states are persisting is the right to tax the bottom layer. They demand that state should get tax right on all dealers and service providers with below Rs 1.5 crore turnover.

“The critical issue of cross empowerment still remains unresolved. Are we close to a resolution? I am still keeping my fingers crossed. If we reach a solution on this, then I will say it is a done deal.” FM revealed the conflicting stand between the states and the Centre that deadlocks the discussions.