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“Senior officials of
Finance Ministry conveyed to the Committee in unambiguous terms about the
Centre’s preparedness to compensate states for fully switching over to the GST,”
Chairman of ECSFM told reporters.
The GST, which seeks to replace the Excise Duty and Service Tax at the central
level and Value Added Tax (VAT) and other local levies at the state level, was
first proposed to be introduced with effect from April One this year.
But because of lack of consensus among states and Centre on wide range of
critical issues relating to GST, the new tax regime, which is being termed as
the most radical reform in the Indirect Tax front, is now proposed to be
introduced from April 1 next year.
“With the Centre agreeing
to fully compensate states for adopting the GST the major hurdle on the path of
switching over to the new tax regime will be a smooth affair,” Dasgupta.
Basic infrastructure
The 13th Finance
Commission has already recommended allocation of Rs 50,000 crore for evolving
compensation package for states, which are likely to incur revenue loss for
shifting to GST.
“The Committee was told clearly that the Centre is willing to fully implement
the Finance Commission’s recommendation on compensation packages”, Dasgupta
said. As part of exercise to prepare the basic infrastructure for facilitating
the implementation of the GST the ECSFM decided to constitute a high-powered
committee to evolve the module for Information Technology infrastructure for the
new tax regime. The committee, which will be headed by Unique Identification
Authority of India (UIDAI) Chairman Nandan Nilekani, is expected to submit its
report within 3 months, Dasgupta said.
“For successful implementation of the GST across the country one needs an
efficient IT network to provide the back up to the new tax regime. Once the
committee submits the report the final blueprint for the proposed IT
infrastructure will be decided in consultation with the Center,” he said.
At the meeting the ECSFM took stock of the progress made on the front of
preparing the draft for legislation for Constitutional amendments for empowering
both Centreand States to levy GST.
Joint working group
Last year a Joint Working
Group (JWG) was set up to prepare drafts for these proposed Constitutional
amendments. “The draft is more or less ready. It has to be vetted by the Law
Ministry . We have asked the JWG to come out with drafts in 15 days time,”
Dasgupta said. He indicated that the ECSFM would meet the Finance Minister
Pranab Mukherjee next month to apprise him of the progress made on preparation
of ground work for introduction of the GST.
DH News Service
Striking a consensus
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13th Finance Commission
recommends Rs 50,000 cr as compensation package for
states
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Panel set up for IT
infrastructure
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Draft document for
constitutional amendment to be ready in 15 days Meeting
with Pranab Mukherjee next month
Source: Deccan Herald, India, dated
21/05/2010
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