Union Finance Minister Arun Jaitley said last week that the government and states were racing against time to meet the proposed April 1 deadline for the roll out of the Goods and Services Tax (GST). His remarks reflected the challenges that have emerged over the past few weeks. At the last meeting of the GST Council, 10 of the 11 chapters of the integrated GST law were approved, but a binding solution to contentious issues such as dual control on tax administration and cross empowerment and the issue of powers to levy taxes in territorial waters proved to be elusive. In the absence of a consensus on these, it is virtually impossible to implement the law.
Jaitley has said the government will strive for a consensus: It has consciously avoided a voting in the GST Council to build a healthy precedent. That’s welcome. But if India has to make the transition towards a common market especially at a time of great economic uncertainty, the Centre will need to be more magnanimous.
