Business OpportunitiesState FMs to meet Pranab on GST in Jan
As the April 2010 deadline for the goods and services tax (GST) inches closer, the empowered group of state finance ministers plans to meet Finance Minister Pranab Mukherjee on January 7 next year to brief him about the progress on preparing a roadmap for GST and sort out the issues.
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“For certain difficulties that were reported to us, it would be tough to introduce the Bill for GST in this winter session (of Parliament). The finance minister has said he is willing to discuss with us in January after this Parliament session is over,” Asim Dasgupta, chairman of the empowered group and finance minister of West Bengal, told reporters after a meeting of the committee today.
Dasgupta said that after their proposed meeting with Mukherjee, they would be able to take a decision on Constitutional amendment and other preparations related to the introduction of the tax regime.
The meeting with Mukherjee will be preceded by a discussion with a taskforce of the 13th Finance Commission and economic think-tank National Institute of Public Finance and Policy (NIPFP), which released two separate reports on GST.
The empowered committee discussed the views of the states on GST. In the meeting on January 7, which could be rolled over to January 8 if some issues remain unresolved, will have presentations from the representatives of the Finance Commission and NIPFP on their reports on GST. Commenting on the recommendation of the Finance Commission task force, Dasgupta said: “We have taken a note of it. We will consider it among the other proposals from industry, trade etc.”
The report of the task force, led by Arbind Modi, has suggested a central GST of 5 per cent and state GST of 7 per cent. It also recommended the new tax regime should be deferred by six months, from April 1 to October 1, 2010.
It also said dealers in high value goods comprising gold, silver and platinum ornaments, precious stones and bullion should be allowed to opt for the compounded levy of 1 per cent each without the ceiling of Rs 40 lakh, since high value goods “are prone to smuggling due to high tax incidence”.
A state finance minister said if the April deadline was missed, which is “likely because the process of constitutional amendment and clearing of Bills would take at least four months”, implementation of GST would have to be deferred till next year, as introducing it in the middle of year could create problems.