IS IMPLEMENTATION OF GST STILL SAILING IN BOATS OF UNCERTAINTY ?

IS IMPLEMENTATION OF GST STILL SAILING IN BOATS OF UNCERTAINTY ?

Goods and services tax (GST) council held meeting and yet again ended on an uncertain note, effectively ruling out the possibility of implementation of GST from 1 April. In this two day meeting the outcome came out to be insignificant as the litigious issue of sharing of administrative powers was not taken up at all.

A new issue raised under GST. Instead of equally dividing the GST tax rate as determined initially by the centre, Said states are now demanding that the split in the tax rate should be in the ratio of 60:40. Where 60% shall go to states and only 40% remains with the centre.

However new issues are cropping up in each and every council meeting and no matter reaching its conclusion, the self imposed timeline of 1st April 2017 seems to be a far fetched dream. With this it is more rational to assume that the roll out dates shall either be 1 June or 1 July and if the roadblock continues it may further shift to 1st September.

GST to be implemented before 16th September, 2017 because the Centre and States have been given powers to impose taxes on goods and services under current laws only upto 16th September, 2017 after which there will be no taxes by Centre or State on goods and services.

According to section 20 of the Constitution (One Hundred and First Amendment) Act, 2016, President has been given power to remove any difficulty and so it appears that even if the GST is not implemented by 16th September, 2017, the imposition of taxes on goods and services will continue.

It is necessarily to mention that the conversion of present assessees to GST model is in full swing as conversion of VAT assessees has already done in many States and the conversion of Service Tax assessees is to commence very soon .

The assessees have been brought in an typical situation where they are being compelled to migrate to the GST regime whereas the date of implementation of the new GST law has not yet declare due to various issues pending .

It’s worth pondering that assessees have been migrated to a law whose legal enforcement is still pending. We hope that this dispute of control between Centre and States comes to an end and a clear picture emerges in the next council meeting to be held on 16th January.

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