Differences persist between Centre, states on GST Bill

Revenue threshold limit yet to be solved

Differences persist between Centre, states on GST Bill

 Despite the government trying hard to introduce the GST bill in the Winter session of Parliament, little headway has been made from states’ side with the empowered committee of state finance ministers insisting on their demand of retaining Rs 10 lakh as threshold limit for levying GST. 

The threshold limit is the level beyond which traders will come under the GST ambit.

The talk between the Centre and the states on a common revenue threshold has been going on since last year but differences have not been sorted out yet, leading to the delay in the introduction of the bill. A majority of states favour a lower threshold to save on compliance costs.

Besides, the states have also been demanding that petroleum, alcohol and tobacco should be excluded from GST. This demand has been going on since the last five years. However, the Centre claims that the discussion is in its last stages.

 Speaking to reporters last week, Finance Minister Arun Jaitley had said that he was on the last leg of his discussion with the states before introducing the amendments to the GST law in Parliament.

The GST Constitutional Amendment Bill, which was introduced in the Lok Sabha in 2011, had lapsed and the NDA government will be required to come up with a fresh bill. 

The Finance Ministry is in the process of preparing a Cabinet note on the GST Bill so that it can be introduced in the Winter session.

Speaking to reporters, GST Empowered Committee Chairman Abdul Rahim Rather said on Tuesday  that the final call on GST will be decided by the GST council and that the views of the states should be respected. Meanwhile, Punjab raised the demand of an even higher GST threshold limit of Rs 25 lakh for imposing GST so that small traders were kept out of the new taxation system.

Punjab Finance Minister Parminder Singh Dhindsa made this point at the empowered committee meeting here.

The GST is expected to subsume indirect taxes like excise duty and service tax at the central level and VAT on the states front, besides local levies.

But, the GST rollout has missed several deadlines because of lack of consensus among states over crucial issues on the new tax regime.

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