It is almost certain that Centre will miss its GST rollout deadline of April 1,2017. Sources suggest that Centre is contemplating option to increase Service Tax rate to compensate for increased revenue estimation.
“There is some thinking of an increase in the service tax rate in case the GST is not implemented from April. A higher rate will help improve revenue and also bring it closer to the proposed standard rate under GST,” said a close source.
However, no concrete proposal has been placed as yet. Final decision will be taken close to Budget day (Feb 1, 2017). It is also expected that Arun Jaitely would reveal revised GST rollout date.
Finance Ministry officials, however, stressed that efforts are still on to roll out GST from April 1, 2017. “It is a tight schedule, but it is still very much doable. Much will depend on the January 16 meeting of the GST Council,” said an official.
It remains to be be seen if government is ready to hit common man’s pocket especially when success or failure demonetization is still in debate.