The Central Government’s move to find a solution to the GST debacle hit another roadblock, with states opposing certain current proposals. While there is some clarity on how GST will be imposed when it comes to trade by road, there seems to be confusion when it comes to trade via open waters. States having good ports and access to international waters are not satisfied with the proposal made by the centre. This proposal intends to tax any transaction which takes place within a radius of 12 nautical miles from any state boundary. The Centre would collect this tax and in turn give it to the state concerned.
A total of 5 states have opposed this formula, stating that they stand to lose more than they gain. Karnataka proposed a new formula towards this end, with the other states opposing this move being Gujarat, Kerala, Maharashtra, and Odisha. The Supreme Court is listening to various pleas regarding GST, with this new move expected to further delay the implementation. The BJP will aim to sort out the entire issue and roll out GST by April, with Finance Minister Mr. Arun Jaitley chairing a meet between the states and the centre to this effect.
GST or Goods and Services Tax is a new form of indirect tax which has been proposed by the Centre. Under this new reform, tax will be levied and collected at different stages of production/manufacture, aiming to eliminate the current concept of multiple state taxes. The move would reduce the overall tax paid by a consumer, but states have opposed the tax sharing formula proposed by the government. Administration of the proposed law is the biggest hurdle right now, with no consensus reached yet. The states are looking for a horizontal split of the tax, whereas the centre is not in favour of this, citing lack of administrative expertise.