FinMin says no need to re-notify Act on GST

No legal infirmities in provisions notified: Adhia

The finance ministry on Monday clarified that there are no legal problems involved in the notification of the Constitution amendment Act on the goods and services, a day after speculations were raised that the government might have to re-notify the Act as existing wordings would not allow it to impose excise duty on goods even now.  

"DoR (the department of revenue) examined the validity and implications of notifications dated 10th and 16th September with respect to existing taxes imposed by the Union and states. There is no legal infirmity in these notifications," revenue secretary Hasmukh Adhia said in his tweets.

He added that the law department has confirmed that there appears to be no legal requirement to issue any further clarification or notification in this regard.

In a notification, the finance ministry has made the GST Council to come into operation from September 10. That creates no confusion. The confusion arose from its second notification where it notifies provisions of 19 sections under the Act to come into force from September 16.

Among these notifications, most of the complications were interpreted to have come from provisions of the section 17 of the Act.

The provisions say in the entry 84 of the seventh schedule of the Constitution, under  which the government imposes central excise duty, petroleum and tobacco would replace other items.

This was meant to assume that the government would lose its power to impose the excise duty on other goods since the provision has come into force from September 16.

Pratik Jain, leader in indirect tax, PWC, said the notification had, in fact, created some issues.

In fact on Sunday, Adhia had tweeted that some questions were raised about the notifications issued recently in respect of GST Constitution amendment Act. The finance ministry, he had tweeted would clarify the correct legal position on Monday and issue amendments if the need be.

The government seems to be reading provisions of section 17 in conjunction with those of section 19, which was also notified on September 16,  Jain said.

The section 19 says-- notwithstanding anything in this Act, any provision of any law relating to tax in force in any State immediately before the commencement of this Act shall continue to be in force until amended or repealed by a competent Legislature or other competent authority or until expiration of one year from such commencement, whichever is earlier.

When asked that the provisions in section 19 deals with state, Jain said the government appears to be including the Centre also in the State.

State could also be interpreted to mean government.