In a big disappointment, the momentum for the implementation of the goods and services tax (GST) is likely to slow after the Centre and states failed to reach consensus on jurisdiction over assesses. The informal GST meeting of Union Finance Minister and his state counterparts called to break the political deadlock on sharing of administrative control under the proposed goods and services tax (GST) regime, remained inconclusive, therefore discussion will continue on November 25 to work out the modalities.
The important meeting which came ahead of the formal meeting of the all powerful GST Council on November 25, was held after the Centre and states were deadlocked over the issue at two previous meetings, including sharing of administrative control under the proposed GST regime so that a tax payer is not assessed by both the Centre and the relevant state, the so-called issue of dual control.
States like Uttarakhand, West Bengal, Uttar Pradesh, Tamil Nadu and Kerala insisted on exclusive control over small businesses, which earn less than Rs 1.5 crore in annual revenue, for both goods and services. They feel states have infrastructure deployment at grassroots level and small taxpayers are familiar with state authorities. On the other hand, the Centre is unagreeable to the demand as it wants single registration mechanism for ease to service taxpayers.
The government aims to roll out GST from April 1 next year, which will subsume excise, service tax and local levies. Both the Centre and states will further meet on November 21 and try to workout a solution ahead of the meeting of the GST Council on November 25. At the last meeting, the Council agreed on a four-slab structure - 5, 12, 18 and 28 per cent along with a cess on luxury and ‘sin’ goods such as tobacco.