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Finance minister Pranab
Mukherjee is stepping on the gas pedal to push the GST and this time he is ready
to offer more money to states as compensation to convince them on implementing
GST.
Will the finance
minister’s bargain work?
Well, some of the states, those important for a consensus, are happy with this
overture.
Only a few months after saying he was willing to offer as much as Rs 50,000
crore, Mukherjee is willing to loosen the strings of the government's purse
further.
In a communiqué to state governments, the finance minister has indicated he is
ready to pay more compensation to states against their revenue loss due to the
GST.
However, the amount of the compensation is yet to be discussed as the tax base
for GST is still undecided.
States have rejected the thirteenth finance commission's Rs 50,000 crore
compensation package and even the revenue neutral rate of 12 per cent.
For the moment states like Bihar are pleased with Mukherjee's offer.
Meanwhile, the state finance ministers are expected to meet the finance minister
early next month.
Well, what’s to be seen now is whether the finance minister’s proposal will help
in introducing GST by April 2011.
Source: NDTV.com, India, dated
21/05/2010
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