Synopsis of the 7th GST Council meet
In a series of Goods and Services Tax (GST) Council meetings, the 7th GST Council meet was conducted on 22-23 December 2016. Amidst the political friction due to demonetisation, the 7th GST Council meet started with the agenda of building consensus on three major GST legislations (Central GST, Integrated GST and the Compensation Law) and sorting out the issue of ‘cross-empowerment’ (dual control over the assessee). The synopsis of the 7th GST Council meet is given below:
- On the first day of the 7th GST Council meet, the members debated over the provisions of the draft Central/state legislation three legislations mentioned above and parked the contentious issue of cross-empowerment for the second day. Finally, by the end of the meeting, the council reached a broad consensus on the draft of Central and state GST Legislations.
- A consensus was also built on the method of compensation of revenue loss to the state. Finance Minister Arun Jaitley, while briefing the media on the GST Council meet, said that states will get 100 percent compensation for revenue losses. Further, he added that compensation to states for the loss of revenue from the rollout of GST shall be paid every two months. The Finance Minister also stated that the source of compensation contained in the current draft law shall be redrafted and the legally vetted language shall be placed before the Council for approval in the next meeting during 3-4 January 2017.
- However, the GST Council again failed to settle the vexed issue of cross-empowerment under which states want GST-levying power for taxing small traders or assessees with an annual turnover of INR 15 million.
- The Council will meet again on 3-4 January and take up the issue of dual control and Integrated GST Law. The Finance Minister is also set to hold budget consultations with the state Finance Ministers in the second half of the next GST Council meeting.