NEW DELHI: The deadlock over the Goods and Services Tax (GST) continued on Wednesday with the Centre and states refusing to budge from their respective positions on issues like control of tax payers and taxing high-sea trade. The stalemate threatens to delay the rollout of the tax reform till September. It was scheduled to come into force from April 1.
While sectors like telecom, IT, banking and insurance want centralised registration, states have demanded an integrated GST law. The two-day meeting of the all-powerful GST Council, the 8th in a row, made little headway in finding a solution in this regard. “We know the difficulties, we are moving against time,” Union Finance Minister Arun Jaitley said.
The Council will meet again on January 16 to discuss the issue of jurisdiction over assessees and hopefully find a solution to the differences on taxation of territorial waters. The states are demanding a status similar to the Special Economic Zones for their coast waters. “The issue of high seas being part of Centre or State territory is close to resolution. But, a Constitutional solution has to be found,” Jaitley said. The states have suggested that the Centre can make legislation that would allow the transactions in territorial waters to be treated as intra-state sales.
Kerala Finance Minister Thomas Isaac said the other remaining issues before the GST Council include ways to fund the compensation to states for GST rollout and states participation in Integrated GST (IGST).
“Working overtime, it should be possible to meet the deadline of September. I am not very optimistic about rolling GST out in June/July. Because it is a new tax and lot of complexity involved, it would be better to move in after full preparation. So GST, to my understanding, will be implemented from September,” Thomas Isaac said.