GST : THE FOCUS SHIFTS FROM CENTRE TO STATES NOW

[Dr. Sanjiv Agarwal]

After 29^th March, 2017, 6^th April, 2017 became a historic day in the journey of GST when Rajya Sabha easily passed the GST Bills after a day long debate. It is important to note that despite an eight hour long debate, Rajya Sabha did not recommend any change in the GST Bills. Perhaps, opposition parties and Congress in Particular, realized that being a Money Bill, they had not much to do. So better, be a party to the winning game rather than the party spoiler. Moreover, nation is watching the developments and Congress's approach on GST in Rajya Sabha could be just a beginning of damage control exercise, after recent debacle in state elections.

The Congress withdrew all the amendments it had moved against the Bills including the one on the role of GST Council vis-a-vis supremacy of Parliament to respect the consensus in the GST Council. Thanks to the role played by Dr. Manmohan Singh whose wisdom prevailed.  However, amendments made by other parties, i.e., CPI (M) and Trinamool Congress were put to vote but defeated.

The Parliament has also passed Taxation Laws (Amendment) Bill, 2017 on 6-4-2017 which contained consequential amendments in Customs Act, 1962 and Central Excise Act, 1944 besides repealing various cesses on implementation of GST. The main cesses are education cess, secondary & higher education cess, swachh bharat cess, krishi kalyan cess, jute cess, coal cess, sugar cess, water cess, rubber cess, amongst others.

Now that all GST related Bills (CGST, UTGST, IGST Bills and State Compensation Bill) have been passed by both houses of Parliament, the focus now shifts to States. All 31 States including Delhi and Pondicherry have to pass the SGST Bill in their respective State legislative assemblies. It is hoped that they will do it sooner or later but sooner is better.

Though no deadline has been given to States, it is expected that they should pass the SGST Bill on ASAP basis by convening a special session. As of now, no State has passed the SGST Bill. The next Council meeting is slated to be held on 18-19 May, 2017 and it will be expected that all States pass the Bill by then, duly assented by the Governors of the State. At central level, the Bills will become an statute or law on President assenting to the same. It is expected that this may be done in next 2-3 working days. However, these Act will be notified for implementation only after States also pass the Bill and this may happen only towards mid June, 2017 or so. It may be noted that SGST Bill  will have to be passed by all the States as GST is a pan India tax law and no State can be left. Even if one State does not pass the Bill, GST Laws can not be implemented in piecemeal.

Two important announcements made in Rajya Sabha by the Finance Minister are note worthy-first that he concedes GST as a collective property. Good that he admits and that too as a property (asset). What about the responsibility for its fair administration. He also went on record conceding or admitting that once the GST is implemented harassment of businesses by different authorities will end. What about taking action for past and present harassment ? Unfortunately, there is no provision for that in GST laws through anti-profiteering measure find place.

FM sir, not fair in a game which Government claims GST law to be a transparent, forward looking piece of tax law, futuristic and reform oriented. In fact, Government should also promise to the nation that tax rates will be reduced if there is buoyancy in tax revenue rather than enhancing revenue targets.

While the Government intends to implement GST from 1^st July, 2017, it may actually not happen. There are strong chances of it getting implemented from 1^st September 2017 only as time left is too short for preparedness, awareness and to redress the issues and concerns involved. A lot of ground work has to be done by all stakeholders. We have only overcome a major legislative hurdle as of now.

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