GST: Logjam persists over high sea taxes, dual control

The Council is yet to make a decision regarding the fund to be allocated for compensating states for the loss of revenue after the implementation of the GST bill. On the first day of the meeting, states demanded an increase in the number of items on which cess is to be levied. Initially, a sum of Rs 55,000 crore was proposed to compensate the states, however, it is likely to be increased to Rs 90,000 crore post demonetisation.

States participation in Integrated GST (IGST) also continues to be a matter of concern for the GST Council, according to media reports.

Some states have also demanded that the GST revenue from the goods that fall under the highest tax bracket should be shared in the 60:40 ratio as opposed 50:50, said Thomas Isaac, finance minister of Kerala. This issue will also be discussed later.

On the first day of the meeting, coastal states like West Bengal, Kerala and Karnataka asked for levying taxes on goods within 12 nautical miles in the sea, thus delaying the IGST draft law on inter-state trade. The Council failed to reach a consensus on defining a state and whether to include 12 nautical miles of high seas in states’ jurisdiction.

The Centre seems to be accepting the states’ demand to include high seas into their jurisdiction, however, it is yet to give its word on the same, added Isaac. The decision could be taken on January 16. (KD)

Fibre2Fashion News Desk – India