GST unlikely to roll out on April 1, 2017: Kerala Minister

New Delhi, Dec 9 (IANS) Implementing the Goods and Services Tax (GST) by the April 1, 2017 deadline planned by the Union government appears to be unlikely owing to the political fallout of the move to demonetise high-value currency, Kerala Finance Minister Thomas Isaac said on Friday.

“Demonetisation has indeed vitiated the whole atmosphere,” Isaac, who is a member of the GST Council, told BTVi channel in an interview.

“Discussions in the GST Council have been cordial, in a spirit of consensus and Parliament had passed the Bill unanimously. Now there is no such general atmosphere, Parliament is divided,” he said, referring to the almost continuous disruption of proceedings being witnessed during the winter session on the demonetisation issue.

“Demonetisation is a big strike on the revenues of the states, and in Kerala, we are estimating our revenues to decline by 40 per cent from impact of demonetrisation,” he added.

Isaac said that Kerala, where remittances from abroad, mostly from the Gulf, make up 35 per cent of the Gross State Domestic Product (GSDP), has seen this income reduce to a trickle due to the uncertainties created by demonetisation.

“Our growth rate, which has been around 7 per cent for around two decades, will come down to 4 per cent,” he said.

Other states like West Bengal have said they are wary of implementing the new indirect tax regime in the aftermath of demonetisation as this might destabilise the economy.

Isaac also said that in a situation where the states are going to lose the right to tax when GST is implemented, and had acceeded to the centre on almost all issues, “the Centre will have to take one step back from the position they have adopted” on the only remaining issue of “cross-empowerment” concerning jurisdiction over assessees.

“It can’t be a one-way traffic. Why can’t the Centre accomodate on the question of how GST should be administered?” he asked.

The fifth meeting of the GST Council remained inconclusive here on Saturday as the impasse over the issue of assessee jurisdiction continued.

With five meetings of the GST Council being held, the issue of dual control or who will exercise control over GST assessees — the Centre or the states – remains critical.

The next meeting of the Council is slated for December 11 and 12.

“It is unlikely that we will decide on the issue when we meet on 11th and 12th,” said Isaac.

–IANS

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