The Law ministry has said only the central government can control traders under the Integrated Goods and Services Tax (IGST) law and State Governments should not be empowered to levy and collect IGST on inter-state sales and purchases. The opinion is bound to upset many states on the eve of another round of meetings of the GST Council. The law ministry’s opinion in favour of the central government will be a setback to states such as Tamil Nadu and West Bengal, and could be a stumbling block to GST. The proposal will be presented in the GST Council meeting scheduled on December 11 and 12.
The ministry’s opinion has come at a time when all the states want power to control traders engaged in inter-state sales and purchases. The draft integrated GST law says only the central government will have administrative power over all traders engaged in inter-state sales. The meeting of the GST Council, headed by finance minister Arun Jaitley, held last week failed to reach a consensus on the contentious issue of control.