GST rollout deferred to FY18

The rollout of the country’s most significant indirect tax reform is almost certain to be further delayed, with the government easing up on the draft of the enabling model legislation to usher in a Goods and Services Tax. Union Finance Minister Arun Jaitley’s deadline of April 1, 2016 for the GST bill’s passage will almost surely not be met, although he had recently expressed the hope that the Constitution Amendment Bill would be passed in the Budget Session. The government has been tentatively eyeing a mid-year rollout of the tax – either June 1 or October 1. But now the buzz is that the implementation of the GST may be pushed back by a year to April 2017.

“Even if the government manages to push through the Constitution Amendment Bill during the current session, it does not mean GST can be rolled out immediately. GST implementation also requires ratification by 50 per cent of the States,” a senior official told Indianmandarins. “Looking at the present scenario, it looks like the GST will not see light before April 1, 2017,” said Bimal Jain, Chairman, Indirect Tax Committee of the PHD Chamber of Commerce.

Also, the Centre is yet to formally provide the report on the possible GST rates drawn up by a panel headed by Chief Economic Adviser Arvind Subramanian. “Why should we put it out when there is no clarity on the political support,” a senior NDA Minister said.

A person familiar with the development said, “Discussions between the BJP and the Congress have been held at various levels, but a clear signal of intent is still awaited. It seems that the Congress has been shifting the goalposts.”

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