GST and Union Budget 2017

Ranjeet Mahtani & Sweta Rajan

Prior to the announcement of the Union Budget 2017, the Goods and Services Tax Council (Council) had its ninth meeting on January 16, 2017 and the next meeting is scheduled on February 18, 2017. 

The Council is then expected to clear up all un-resolved issues, and finalise the legislations to achieve another milestone in embracing GST. Nearly all controversial issues have been debated and consensus built amongst members of the Council.  Minor matters will have to be settled, including that of  sharing of administrative powers. At the same time, some legal concerns have been raised (in respect of the decisions of the Council), and it will have to be seen whether these sustain or fall-off. 

Dateline: It was recently admitted by some members of the Council that the likely (earliest) date to implement GST in India is July 1, 2017. In this context, it is hoped that the Finance Minister's speech will reaffirm this dateline, and describe the activities required to embrace GST nationally, and how these will be completed. 

There is some anticipation that in preparing for GST, the Union Budget 2017 will bring about changes to tax rates (especially raise the service tax rate), in order to align with the rate structure proposed for GST. It is also expected that the negative list of services would be revisited to broaden the tax base, once again in preparation for GST; this would prepare the assessees time for the GST regime. Outside of these, significant amendments in central indirect taxation laws don't appear to be on the anvil.