Clouds over the likely date of GST are now emerging clearer that GST may not be possible on 1st April, 2017 and that date is certainly going to be missed but at what cost, nobody knows. However, delay certainly not in India’s interests.
The GST Council has had six meetings so far. They plan big but perform short. On last three occasions, its meetings were scheduled for two days but concluded in just one day each. Their seriousness and lack of home work can be gauged from the very fact they have not even vetted the draft laws in last three sittings. Till the last meeting, they could read down only first 99 provisions out of 195 sections of GST law. Moreover, IGST law and State’s Compensation Bill are also there to be gone through.
Since the Bills have not been discussed fully, there is no question of their being presented before Parliament in the ongoing disruption – full winter session. Even if it could go, Parliament would not have allowed it to be passed.
With entire winter session of Parliament, with two days left, going waste because of irresponsible parliamentarians, of both factions (Government or Opposition), the country is going to suffer on many fronts – no legislative business being transacted, failure to discuss demonetization and review economy, besides of course, taking up GST Bills. After one year was wasted by opposition in clearing the Constitutional Amendment Bill (from last monsoon to this monsoon), if GST Bill is not tabled in Parliament, discussed and approved in next two days, as it is likely to happen now, country and all of us will suffer economically as well as financially. Already lot of people’s money has flown so far into the making of GST law by various quarters, not just Government, GST’s impact – positive or negative will affect economy, more so in post demonetization regime. With lesser time with every day passing by till September 2017, the date by which India must roll out GST, it will become challenging as well as risky for the nation. With next elections also narrowing down in terms of time, Government’s will may also be at test.
States and centre are locked on contentious issue of dual control, i.e., who will ‘tax and monitor’ whom. Further, in post demonetization scenario, amount of compensation has become an issue –States claim, and may be right in doing so, that their revenues will be substantially impacted adversely due to demonetization.
All State Governments as well as Centre represented by politically elected leaders does not seem to be bothered about country, tax payers and economy but with their own selfish and politically vested interests are taking the country, its economy and countrymen for a ride. Who will interfere at this stage ? Let there be general referendum on the unresolved issues on GST or else, we can hope something from the Apex Court or does it means that, do we indeed need a Government at all ? Someone ought to address this issue to the people irresponsible for this mess.
The GST, so called biggest tax reform for now, is in a big mess arising out of inflated political ego of all partymen trying to show down each other. While centre can be blamed for improper management, opposition’s non-agreement is also unwanted to large extent. It is not that there could be no solution. They should all agree, sooner the better or else 16th September will come after which all present indirect taxes which are to be subsumed in GST can not be levied and we can not also go back to old taxes unless constitutional changes are reversed. That would be suicidal.
Now what next ? It is unlikely that GST model law is cleared by the GST Council at an early date as it is still pending with GST Council. For last three occasions, meetings are curtailed from 2 days to 1 day and then deferred. Out of 195 sections in model law, not even hundred have been okayed so far. Now that there is no hurry (as 1st April is virtually ruled out) which will be known in next 2 days, the work may slow down, seriousness may dilute and budget will be on our head. There could be another 2-3 GST Council meetings to vet the model revised laws for CGST / SGST / IGST and Compensation Bill before these are recommended to the Parliament / State Assemblies.
With Budget and elections in six States round the corner, GST is likely to take a back seat and may be introduced at the earliest from 1st July, 2017 or at the latest by 1st September, 2017.
If GST has to come in April, 2017, the only possibility which appears is that Government may try to sort out the contentious issues in next few days and then convene a special session of Parliament. If that happens, one may still hope for GST from 1st April, 2016 but will the combined opposition cooperate is a million dollar question. Also, it would be cutting too fine. Till then, as the events may unfold, let’s keep the fingers crossed.