Dr. Sanjiv Agarwal, FCA, FCS
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No headway in GSTC 8th Meeting

The 8th meeting of GSTC held on 3-4 January, 2017 concluded without any break through on cross empowerment, territory and compensation issues. The issue of territory was not raised earlier and compensation issue has triggered again as a fall out of demonetization.

Certain non – BJP ruled States have also started showing indifference to April 2017 roll out. Kerala is talking of September owing to short time frame, incomplete preparation and lot of complexities involved.

The issue of dual control is an administrative issue which has taken too long in deciding. The States have their own vested interests based on revenue and control over assessees and this issue is neither legal nor technical. GSTC is indecisive on  this and delay in sorting out is now going against the country’s interests. GSTC and states ought to look out of box at the larger picture in country’s interests.

In fact dual control is an issue directly affecting the stakeholders (tax payers) but it is unfortunate that body is bothered to consult taxpayers on this. Perhaps they know the answer- Tax payers are only interested in ease of doing business, simple taxes and one window administrative interface.

The States are now also demanding levy of cess on more products, apart from demerit goods, as decided earlier, to cover up for possible revenue loss from GST in post demonetization era. They are now talking of Rs. 90K crore as against Rs. 50K crore earlier.

GSTC is now becoming a body to micro manage and protest for State revenues rather than facilitating introduction of GST.

The 9th meeting of GSTC is scheduled for 16th January, 2017 again to discuss territorial and dual control issues. Any more delays would only cost the country and its economy, not the individual states.

MOF, Government of India is still maintaining the stand that it is hopeful of meeting the GST roll out deadline without revealing the road map. Perhaps it is just not possible, given the present political environment in country. GST is an impossibility in April, 2017, a hope for July, 2017 and an optimistic certainty by September 2017.

Union Budget 2017: February 1st or Later ?

While Union Cabinet has cleared that forthcoming Union Budget for the fiscal 2017-18 shall be presented in Parliament on 1st February, 2017 after the usual Economic Survey on 31st January, 2017, it seems to be landing into controversy as the Election Commission has announced the election schedule in five States to be held in February – March, 2017.

Almost the entire opposition, which is already at loggerheads with the Central Government on account of demonetization and which did not allow Parliament to function during entire winter session, is opposed to this idea and has already raised concerns that budget should be presented after elections as the budget proposals can influence the voters and that the Government may try to woo the voters through the budget proposals. They have also complaint to Election Commission.

These are State elections and that too in only 5 States (only UP being a big State) out of 31 States in the country. Country has to function and economy can’t stop for elections. Even if elections were not pre-poned (though there are valid economic reasons for that), it was scheduled for 28th February.

In pre-budget meeting yesterday, West Bengal Finance Minister walked out of the meeting stating that the budget is meaningless as demonetization has crippled the economy and it is like a financial emergency in the country.

India can not afford to accede to such demands / requests and these ought to be just ignored as rubbish. In fact, all political parties should allow the normal economic and business activities to continue as usual. They need to rise above board and establish instances of being responsible leaders or at least citizens.

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