SKP Group
SKP GST Update
4 January 2017 | Issue 26
Synopsis of the 8th GST Council Meet

In a series of Goods and Services Tax (GST) Council meetings, the 8th GST Council meet was conducted on 3-4 January 2017. With the government considering an early Budget session which is likely to be held in the first week of February 2017, time is running out to build a consensus among all the states and Centre on many contentious issues like Dual Control (cross-empowerment), the Integrated Goods and Services Tax Act, definition of states, GST Compensation Fund, etc. These contentious issues are likely to be considered during the next GST Council meet scheduled on 16 January 2017.

The synopsis of the 8th GST Council meet is as follows:
  • No consensus has been achieved on ‘Dual Control’. 
  • The Finance Minister Arun Jaitley said that the deadline of 1 April 2017 for GST implementation seems highly improbable. 
  • States demanded taxation rights for sales made in the high seas (within 12 nautical miles). Furthermore, the states requested the GST Council to increase the number of items on which this new Cess is to be levied. The Cess has been additionally proposed to compensate the states for their revenue loss (estimated at INR 900 billion). 
  • Accordingly, the GST Council assured that the Cess will be levied on a list of commodities notified by the GST Council. At the end of year five, this Cess will be merged with the GST rate or divided between the Centre and states, as the Council decides. Earlier, the GST Council had decided that the Cess would be levied only on four commodities. 
  • Delivering a presentation before the GST Council, Commerce and Industry Minister Nirmala Sitharaman sought exemption of IGST on goods transferred from Special Economic Zones (SEZs) across the states. She added that since SEZs are considered as economic zones outside the country’s territory, IGST should not apply on transactions between them. She also sought lower GST rates for employment-intensive plantations, leather and cement industries and urged the Council not to end duty exemptions for exporters. 
  • As many as six sectors, including banking, insurance, IT, telecom and civil aviation delivered presentations before the GST Council and pressed for a single registration either with the Centre or states under the GST regime.
SKP's comments
Post the GST council meet, Finance Minister Arun Jaitley addressed the media and mentioned that the 1 April 2017 deadline for GST implementation looks improbable. However, in the overall context of the GST implementation process, even if GST gets delayed by few months, we can certainly expect GST to be implemented some between April and September 2017.

On the bright side, the time leeway could prove to be a blessing in disguise for many industries/organisations who are currently in the GST transition process. The delay could fetch them additional time to be GST compliant right from day one.

19 Adi Marzban Path | Ballard Estate | Fort | Mumbai 400 001 | India
+91 22 6730 9000 | |
Mumbai | Pune | Hyderabad | New Delhi | Gurgaon | Chennai | Bengaluru
Member of Nexia International
This update contains general information which is provided on an “as is” basis without warranties of any kind, express or implied and is not intended to address any particular situation. The information contained herein may not be comprehensive and should not be construed as specific advice or opinion. This update should not be substituted for any professional advice or service, and it should not be acted or relied upon or used as a basis for any decision or action that may affect you or your business. It is also expressly clarified that this update is not intended to be a form of solicitation or invitation or advertisement to create any adviser-client relationship.

Whilst every effort has been made to ensure the accuracy of the information contained in this update, the same cannot be guaranteed. We accept no liability or responsibility to any person for any loss or damage incurred by relying on the information contained in this update. 

SKP Business Consulting LLP is a member firm of the "Nexia International" network. Nexia International Limited does not deliver services in its own name or otherwise. Nexia International Limited and the member firms of the Nexia International network (including those members which trade under a name which includes the word NEXIA) are not part of a worldwide partnership. For the full Nexia International disclaimer, please click here.

© 2016 SKP Business Consulting LLP. All rights reserved.