New Delhi/Bengaluru: The two-day meeting of the goods and services tax (GST) council is all set for a stormy start with states raising concerns on some very basic rules of business and conduct proposed by the Centre.
This does not bode well for the GST council as it has to arrive at a consensus on many contentious issues like dual control and tax rates and finalize the three draft legislations within two months for the Centre to meet the implementation deadline of 1 April 2017. The government aims to table the central GST law and the integrated GST law in the winter session of Parliament expected to start in November.
The GST council—the representative body with Union finance minister and state finance ministers as members—is meeting for the first time on Thursday and Friday in New Delhi after it was constituted earlier this month.
The main agenda of the first meeting is to finalize the rules of conduct and business for the council, including the process for calling the meetings of the GST council, details about who can represent the states and will have the voting power as well as the election of the vice-chairman from among state finance ministers. The Union finance minister will be the chairman of the GST council.
But finalizing these rules of business may be easier said than done. After receiving the agenda earlier, Kerala finance minister Thomas Isaac wrote on Facebook, “The agenda gives me an impression that the NDA (National Democratic Alliance) will take unilateral decisions given that the Central government and the BJP-ruled states together form a majority in the council, there is no mention towards arriving a mutual agreement through broad discussions.”
He further opposed the provision that the meeting of the GST council will be called within a seven-day notice period which could be further shortened to only two days in case of urgency.
“The agenda says a finance minister cannot send anyone else as his replacement from the state, and also that the state officials are barred from attending the council meeting if the minister is not coming. It says the chairman (finance minister) of the council will decide where each minister has to sit and that the ministers have to register their attendance. The officials of the central government seem to have forgotten that they are talking to state ministers, not to their subordinates,” said Isaac, adding that he will take up these issues in the meeting on Friday.
These issues are surfacing at a time when the states and the Centre are already struggling to find some common ground.
The council will also discuss the issue of sharing of administrative control between the Centre and the states and tax rates without arriving at a consensus, Mint had reported on 21 September. Consensus also eludes on what should be the threshold under GST. While the Centre prefers to exclude all traders with a revenue of Rs.25 lakh from GST, some states prefer this ceiling to be Rs.10 lakh.