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The finance ministry said
that it prefers only a single rate at the state level that will apply for all
goods and services.
The Centre has made its responses public by inviting feedback from trade and
industry.
In response to the
discussion paper floated by states in November last year, the finance ministry
has said that it in favour of only one rate for goods, one as the central GST
and the other as the state GST for goods.
That is because the
Centre wants to prevent an inverted duty structure wherein raw materials might
get taxed at a higher rate than finished goods.
The centre is also
worried that dual rates could push the GST rate up with a large number of items
moving on the lower rate.
Also, this could also
raise similar demands for having two rates on services.
More interestingly,
states have proposed to mention the GST rates only at the time of making the
legislation.
However, the Centre has
put its foot down, saying it will have to be discussed in public before it
becomes law.
Not only this, the Centre
is also insisting on bringing big ticket money spinners like alcoholic beverages
and petroleum products under the GST chain, to which the states are not
agreeable.
These strong objections by the Centre clearly indicate that the government is
not ready with even a blueprint of GST, let alone rolling out a new tax regime
even in the next six months.
Finance minister Pranab
Mukherjee will now meet the states on the January 28. Hopefully by then the
states will be clear on a new GST dateline.
Source:
NDTV.com, India, dated
25/01/2010
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