GST IN INDIA: IS 1ST APRIL 2017 SACROSANCT?

We often hear that Government is working hard to see that it is able to introduce dual GST in country w.e.f. 1^st April 2017 and at the same time a caveat that the target is stiff and there may be some time overrun.

GST implementation is the top most priority at present for the Government. Recently, at a recent event of 'The Economist – India Summit 2016', Finance Minister made a statement on GST being implemented w.e.f. 1^st April 2016 that 'we look ahead, it is a very stiff target and we are running against time. I would certainly like to give it a try'. At the moment, the Constitutional Amendment Bill has already been ratified by more than the required number (16) of States, i.e. 18 States, which will now go to President for his assent, once procedural formalities are done. Once the assent is received, Constitutional Amendment will be notified and GST Council constituted. Council has to take up certain pending and in restored issues before it such as dual control, rates of GST, dispute resolution methodology etc. The introduction of GST Bills in Parliament and State Assemblies in forth coming winter session would be subject to clearance of these issues at the GST Council. If this is missed, April 2017 will be extremely difficult. Even if it is pressed, it may prove to be a mess.

No doubt, the task is tough as well as long – both politically and logistically. It has to be launched at one go across India (unlike VAT) and from a common date failing which there will be distortions, injustice to stakeholders in State(s) who do not agree to do so and economically unviable to businessmen.

If there are some over runs in terms of time, no body including Government should worry. In fact there is nothing to lose and if we can have a smooth and robust GST regime a bit later. There is no harm in it at the cost of slight more delay. Heavens are not going to fall.

It is desirable to have transparency in drafting final provisions. Since the time the model law has been placed in public domain, there have been more than 40,000 suggestions / feedback on the same from different stakeholders including trade and professional bodies. These need to be considered and fairly dealt with to come out with a refined version of model law which should again be placed in public domain (may be for a short period of 15 days) for further concerns / issues to be pointed out. After all, law is to be implemented by Government and complied with by tax payers. Such a major tax reform can not be allowed to be passed in haste, just to meet a date which was never a concern till now. Then rules and forms ought to be discussed. This becomes necessary as till now, GST law has been framed by tax collectors. Ideally various regulatory authorities and major stakeholders such as SEBI, RBI, stock exchanges, IBA, CBDT etc should also comment on the same. Comments may also be sought from MCA specially on accounting standards, accrual accounting and compliances.

GST, once implemented, is expected to have a transformational impact by creation of a seamless national market in the country for the first time which will also provide a transfer mechanism aiding consuming states. Since GST rate is likely to be revenue neutral rate, Government believes that impact of GST would be positive in long run and at the same time will not hurt the consumers or tax payers.