The Goods and Services Tax (GST) Council will begin it’s crucial two-day meeting on Tuesday as it looks to find a middle path on sharing of administrative powers between the Centre and the states that is acceptable to both sides.
The meeting will also look to finalize the integrated GST bill that deals with the issue of taxation of interstate movement of goods. But for that, it is imperative that both sides agree on the issue of division of administrative powers.
A consensus will help the Centre to table the supporting legislations in the budget session of Parliament beginning later this month. It will also pave the way for implementing GST from the next fiscal—either from 1 June or 1 July.
But a consensus looks elusive. While states like Tamil Nadu, West Bengal and Kerala are sticking to their demand of having administrative control over all taxpayers who have an annual revenue threshold of less than Rs1.5 crore and equal division between the Centre and the states for those above this level, the Modi government is unwilling to yield to this demand as it will leave it only a small taxpayer base of around 7 lakh to administer. The other option being discussed was to only divide the small pool of taxpayers that are likely to be audited under the GST.
“There is no new option on the table as of now. All these options have been discussed multiple times in the GST Council meeting without any headway,” said a person familiar with the development.
So far, all decisions of the GST Council have been made through a consensus. It remains to be seen if the council will resort to voting to decide on this issue.