Moving on a fast track to roll out Goods and Services Tax (GST) from April 1, 2017, the Centre and states in the first meeting of GST council, agreed on a timetable for deciding on tax rate and completion of legislative work, however differences remained on the turnover limit for exemption from the new tax.
Finance Minister Arun Jaitley on the first day of the meeting said that there was a consensus on timetable to solve pending issues, keeping a possible target of April 1, 2017 in mind. He added that the target also involves passage of CGST (central GST) and IGST (integrated GST) laws by the Centre and state GST laws by the state legislatures in the winter sessions itself and the they have two months’ time till November 22 to resolve all outstanding issues.
In the first meeting of GST council states like Tamil Nadu and Uttar Pradesh demanded a larger say than one-state-one-vote principle that puts a smaller state on an equal footing with a large manufacturing one, though the demand was, however, overruled by others. States also could not arrive at a consensus on exemption to dealers from the GST, while some states demanded traders with turnover of Rs 10 lakh or less be exempted, a large number, including Delhi wanted a threshold at Rs 25 lakh of annual turnover. With tax collected from traders being just 2 percent of the total tax collection, majority view was in favour of a higher exemption limit.
The GST Council meeting chaired by Union Finance Minister Arun Jaitley and which includes representatives of all the 29 states and 2 union territories, would further have discussion on compensation formula with regard to the provision for cross empowerment. Also clarity on base year for compensating states for loss of revenue following implementation of GST will be discussed.