New Delhi: In the absence of a consensus on who will exercise control over Goods and Services Tax assessees — the Centre or the states, Finance Minister Arun Jaitley on Friday called for a political push for resolution of the contentious issue and fixed November 20 for an informal meeting in this regard.
A day after a major milestone was reached for a pan-India Goods and Services Tax (GST) regime, when the GST Council decided on a four-slab tax rate, Day Two of the meeting proved inconclusive in arriving at a decision on the issue of dual control, or cross-empowerment.
“This (cross-empowerment) is one of the key issues, discussed even in the third meeting. It was inconclusive and the discussion carried on for the entire day today (Friday),” Jaitley said after the meeting.
“Functionally, you can’t have two authorities competing for the same assessee. This situation has to be avoided. There has to be clearly defined guidelines as to who will assess whom,” he said, adding this is what the political leadership in the council will discuss informally, sans aides or officials.
If the assessee has to go to multiple tax authorities, the objective of GST will be defeated, he added.
“Since it is a complex matter, we do not want to rush. It (dual control) has to be a well thought of solution for which we are going systematically. Five different proposals came in this regard, out of which the discussion revolved around two,” he said.
Jaitley also explained the next administrative steps towards what is touted as the biggest indirect tax reform in the country.
He said the members now needed to discuss four draft bills — Central GST, State GST, Integrated GST and state compensation matter for revenue losses.
These four drafts will be finalised by November 15 and sent to all the sates. States will get one week’s time to suggest changes to the drafts, which would then be placed before the council for approval at its next meeting on November 24-25.
He said the schedule November 9-10 meeting stood cancelled.
The four laws will have to passed by Parliament and state assemblies after the council approves them.
The GST Council has arrived at a consensus on four bands of tax between 5 per cent and 28 per cent, while agreeing to compensate states for losses on account of a shift to this new regime by way of cess.
Demerit goods or sin goods — luxury cars, pan masala, aerated drinks, and tobacco and tobacco products — will invite a tax of 28 per cent plus the cess. The overall incidence with cess, thus, could vary between 40 per cent and 65 per cent.
There has been no consensus yet on tax rate for gold.
The Centre aims to implement the GST regime from April 1, 2017, for which, Jaitley said, the government machinery is “moving on schedule”.