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Rediff.com  » Business » Why it's better to introduce GST from September, not July

Why it's better to introduce GST from September, not July

March 27, 2017 14:10 IST

'States should have enough time. We still do not know the rules. There are a lot of operational difficulties.'

Implementation of goods and services tax (GST) is expected to start from July 1 but Jammu and Kashmir Finance Minister Haseeb Drabu wants a two-month delay.

In an interview he tells Dilasha Seth that states should get at least six months to prepare for the move. On Monday, Finance Minister Arun Jaitley tabled four crucial supporting bills that will enable GST to be rolled out on July 1.

How comfortable are you with the July 1 date?

While it is possible to roll out GST from July 1, it is desirable to implement it from September 1.

Why?

States should have enough time. We still do not know the rules. There are a lot of operational difficulties. The information technology system needs to have a dummy run. A good six months’ time will help. September 1 is a good time to roll out GST.

The GST Bills have been approved by the Council. How fast will things move now?

Three key Bills -- on Central GST (CGST), State GST (SGST) and Integrated GST (IGST) -- stand passed by the Council.

By March 31, it is expected that all the rules are finalised to be notified.

What is the idea behind a cap of 15 per cent on the cess on luxury cars and aerated drinks?

Essentially, an enabling provision that has been put in the law. The intention at the moment is to keep the aggregate rate at 40 per cent, with a 28 per cent GST rate and 12 per cent cess.

The cess is to compensate states. Therefore, an enabling provision has been created for a 15 per cent cess, so that there is no need to go to 28 legislatures to revise it upwards.

When is the J&a Assembly expected to pass the legislation?

Since the template is there for CGST, SGST and IGST, we will get these passed in the assembly. It will convene shortly.

Photograph: Adnan Abidi/Reuters.

Dilasha Seth
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