Finance Minister Arun Jaitley Faces Hurdles for Biggest Tax Reform Launch
The Centre and states covered major distance on the path towards roll out of goods and services tax (GST) when they cleared the bulk of laws for central and state GST.
But the 1st April, 2017 is deadline for implementation of the country’s biggest indirect tax reform is almost ruled out as there was no headway on the contentious issue of division of administration.
PM Narendra Modi aims to push the tax reform to replace various central and state levies with one tax. He is facing conflict from states after his surprise decision last month to scrap high-value currency notes.
Many states such as West Bengal and Kerala have said that PM Modi’s decision to scrap 86% of the cash in circulation had hit their revenue collections as they collect value-added tax on goods and other duties.
The finance ministry Arun Jaitley and state finance officials have broadly agreed on a national sales tax and are making “Reasonable Headway” on a few contentious issues.
Arun Jaitley said that, I am trying my best. He also added that, “I am not going to bind myself to anything. Our effort is to do it as quickly as possible and I think we are making a reasonable headway.”
The much-awaited GST is one of the most significant reforms since India opened its economy 25 years ago and the most important revamping of the tax system since independence in 1947.
K Pandiarajan said that, there is no way we can meet the 1st April, 2017 GST deadline. But officials said that the new tax law would need to come into effect by mid-September when the old system of indirect taxation is due to lapse.