‘Dual control’ of GST to come up at meeting today

New Delhi: The seventh meeting of the GST Council, a high-powered committee of the Centre and all states chaired by Union finance minister Arun Jaitley, on Thursday cleared most of the legislation for the Central Goods and Service Tax. It will now take up the controversial issue of “dual control” on Friday, on which the Centre and states have not yet been able to reach a consensus despite several meetings.

There are serious differences between the Centre and the states on who will assess small traders and services under GST. The issue of compensation to states and Integrated Goods and Services Tax bills are also likely to be taken up on Friday. After that, the GST Council is likely to meet on January 8 to discuss the remaining unresolved issues.

Finance ministry sources said that on the first day the GST Council cleared most of the 197 clauses of the Central GST Bill. “Four to five” issues are left as they need more discussions, which have been flagged, the sources said.

“The issue of dual control requires more discussion as there is a divergence of opinion between the states and the Centre on will tax which set of assessees,” they added.

The states have been unrelenting on their position that they get the right to control all assessees with an annual turnover of upto Rs 1.5 crores. Earlier, it was decided that the states would look at goods tax and the Centre at service tax. However, the issue again cropped up as it was realised that there are some industries or people who are registered as both. States like West Bengal and Kerala, among others, have insisted on exclusive control over the small taxpayers, who earn less than Rs 1.5 crore in annual revenue, for both goods and services. The Centre is ready to accept this on goods, but is not yielding on services.

The government has time till September 16 to implement the GST Act under the Constitution Amendment Bill that was passed by both Houses of Parliament and ratified by more than half the states later.