GST Council okays support bills, stuck on dual control

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NEW DELHI: Negotiations over Goods and Services Tax (GST) remained stuck on the issue of control of tax payers in the new regime even as the GST Council on Friday made headway in approving most of the clauses of supporting legislations.
GST Council tweaked the compensation mechanism to allow bi-monthly payment to states instead of previously decided quarterly payout. The issue of dual control and IGST (Integrated GST) legislation will be taken up at the next meeting on January 3-4.
FM Arun Jaitley said draft CGST (Central GST) and SGST (state GST) 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,” Jaitley said, adding that the council will take up items in each tax bracket after that.
When asked if April 1deadline still stands, Jaitley said, “I am trying my best to do that…left to myself I would like to do that.” Several state ministers were of the opinion that compensation arithmetic wo uld now have to be reworked as the Rs 55,000 crore decided before demonetisation may not be enough as states revenues may take a hit.
West Bengal FM Amit Mitra said states may suffer revenue loss anywhere between 2030% in Q3. He said the number of states which had to be compensated for loss of revenue may go up due to impact of demonetisation on tax collection.
J&K FM Haseeb Drabu said the council can look into various options, including increasing number of years for compensation from five to six or set up a revolving fund in case amount shoots above Rs 55,000 crore.