The Goods and Services Tax (GST) bill are now ratified by more than half the 29 states. This means the new bill only requires presidential assent. With Odisha becoming the 16th state to ratify the constitutional amendment, the decks are cleared for the roll-out of the new tax system. With more than half the 29 states vetting the bill, the amendment requires only the Presidential assent. According to sources, the government will not face any problems from the President side, and the bill will get approval immediately.
Commenting on the development, Revenue Secretary Hasmukh Adhia disclosed that the government would approach the President for his assent to the constitutional amendment. However, this will happen only after all the 16 states pass the bill. As far as the constitutional requirements are concerned, only 16 states are required to ratify the amendment. Hence, the approval from the part of the President is now a formality.
States will lose revenues if GST bill not implemented
Once the Constitutional (122nd Amendment) Act 2014 has been notified, all the states will be required to implement the new GST bill. They cannot be outside the GST regime. Adhia, meanwhile, said that the states would lose all the powers to levy and collect the value-added tax.
Moreover, the states should pass the GST bill to receive a share in the revenue collected from the GST. There is no choice for the states other than to pass the new legislation. He said that Tamil Nadu government is in close contact with the ministry to clear the bill. Interestingly, the ruling party boycotted the bill when it was tabled in both houses of the Parliament.
GST Council
As soon as the GST bill is notified, both the Centre and the States will quickly set up the proposed GST Council. Arun Jaitley, Union Finance Minister, had given enough hints that the Empowered Committee of State Finance Ministers will be converted into the Council. Currently, the committee is headed by West Bengal Finance Minister Amit Mitra. However, the GST council is expected to be chaired by the Union Finance Minister.
IT Infrastructure
In the meantime, developers are working hard to develop back, and front ends for the new IT system. The beta testing of the new software is expected to begin in January. The new software will consume all indirect taxes and levies, which will be rolled out from April 1, 2017. The software includes the technical support systems for both Centre and State segment.
As of this writing, states like Assam, Maharashtra, Haryana, Bihar, Jharkhand, Himachal Pradesh, Chhattisgarh, Gujarat, Telangana, Madhya Pradesh, Delhi, Mizoram, Nagaland, Sikkim, and Goa have passed the GST bill in the respective assemblies.
