GST Bill: Govt puts ball in Amit Mitra’s court

After having prepared the ground for the passage for the goods and services tax (GST) bill, the government is now readying to put a model law in place for the tax reform.


After having prepared the ground for passage of the goods and services tax (GST) bill, the government has readied a model law in place for the tax reform. Sources have told CNBC-TV18 that the state finance ministers’ panel on GST is slated to meet on June 14 and 15 to discuss the draft GST model law.

The centre, which will seek stakeholder comments on the draft law, has tasked West Bengal Finance Minister and GST panel head Amit Mitra to forge consensus among states to help pass the bill.

The GST, which will replace all the key state and central indirect taxes and levies, will need to be approved via a Constitutional Amendment in both the Parliament as well as state assemblies.

The meeting is also likely address the three key issues that have become the bone of contention between the NDA government and the principal opposition Congress. Sources say that while the Centre may show flexibility on whether to introduce an additional 1 percent inter-state manufacturing tax on top of GST — the Congress as well as experts have said such a tax would defeat the idea of having a GST.

The 1 percent tax was an idea propped up by the Centre to pacify some manufacturing states such as Tamil Nadu that are perceived to be at a loss from GST’s rollout. On the second point, the government has decided to not give in to the Congress’ demand of putting the GST rate in the Constitutional Bill.

This will now likely be put in the model law. On the third point of which authority will address disputes that arise from GST, states as well as the Centre have expressed opposition to having a judicial panel. The GST Council will now decide on the mechanism for dispute resolution.

The Centre is targeting GST rollout from April 1, 2017, which will require passage at least during the monsoon session of Parliament.