Takeaways from recent gst council latest held on 3rd & 4th Jan 2017

Significant progress has been made on the Goods and Services Tax (GST) front in the last meeting of the GST Council held on  03 and 04 January 2017.

• The draft Central GST, State GST and Integrated GST laws have been mostly finalised (except a few open areas) and have been sent to the Ministry of Law for review. Once the same are vetted legally, the laws would be placed before the GST Council for formal approval. A 'rates committee' has also been formed, which would be working concurrently to finalise the rate schedule, and the same would be considered by the Council.
• As per reports, the consensus has also been reached on the issue of the compensation to states, and the basic draft of the compensation law has also been approved by the GST Council. The Council had also discussed the list of goods to be covered by the levy of cess, and other sources to fund the compensation for the states.

However, a few open points of consideration are still pending for agreement, which would be discussed at the next meeting of the GST Council on 16 January 2017. These include:

 ^{_{Administration}}

^_#Dual control/ cross empowerment - Though no consensus has been reached on the much-debated issue on the administrative split, the Finance Minister highlighted that majority of the states had a positive attitude on the issue during the meeting. As per reports, the states continue to insist on complete control over businesses having an annual turnover below 1.5 crores. The issue is expected to be discussed at the next meeting.

 ^{_{Coastal states-}}

The issue of the jurisdictional power of states on territorial waters (12 nautical miles) - Another issue which has arisen is the definition of 'state', and the power to levy taxes on supplies made from territorial waters. The state governments are of the view that the power to levy taxes on such transactions is with them, while the centre is of the view that such power lies with the union. There is ongoing litigation on the matter in the current regime. The matter is pending before the Supreme Court as well. Since the issue involves interpretation of the Constitution of India on powers of the state and centre, the matter has been referred to the Ministry of Law for legal interpretation and would be discussed at the next meeting.

In the meeting held on 03 January 2017, representations were made before the GST Council by various sectors (such as telecom, IT, banking, aviation etc) as well as by certain Ministries (such as Ministry of Commerce and Industry) on various key issues pertaining to such sectors. Demand for centralised registration for few sectors came up prominently in these representations.