A year after the levy’s rollout, decision making on the goods and services tax (GST) could get overshadowed by politics as the election season takes over.
Already, the frequency of meetings has come down from an average of over two a month till May to one in a gap of two and a half months. In fact, the meeting in early May was held through video conferencing. The next one is now slated for July 19.
Reaching a consensus might also get tougher, as already seen with issues like inclusion of natural gas in GST and imposition of a sugar cess, both central proposals being resisted.
While the Centre has argued for natural gas’ inclusion, this is being opposed by Andhra Pradesh. The Centre’s proposal for a sugar cess to compensate cane farmers is being opposed by cane producing states like Andhra Pradesh and Karnataka, apart from Kerala. Officials say there could be some revival in action around October-November, before the elections in Rajasthan, Madhya Pradesh and Chhattisgarh.
The GST Council had cut tax rates on a number of items prior to the Gujarat assembly elections in 2017.
However, some of the issues on which consensus has already been reached might go through. For instance, the GST Council meeting next month is likely to clear the return simplification process. Also, the government will have to take a call on extending the postponement of the reverse charge mechanism and tax collected at source, both of which would expire by this month-end.
Badal told Business Standard the ruling Bharatiya Janata Party (BJP) had already gone into election mode. “It is not going to tinker with GST now in a big way.” Assam finance minister Himanta Biswa Sarma (it is a BJP government, too) said there might be one meeting in two months from now “but that is because there is not much on the agenda, unlike earlier”.