Presidential reference may be sought for GST     

After working for months on Constitutional amendments for introducing the Goods and Services Tax (GST), the Centre is now likely to make a Presidential reference to the Supreme Court for it as no consensus seems to be emerging among the states and the Centre on the issue. Under Article 143 of the Constitution, the President may seek the advice of the Supreme Court on any question of law or fact which is of such public importance that it is expedient to obtain the opinion of the Supreme Court on it. The Supreme Court after such a hearing, as it thinks fit, reports its opinion to the President.

“The Centre is planning to make a Presidential reference to the SC on the matter as the working group that was formed to work on the Constitutional amendments has not been able to work out a solution acceptable to both the centre and the states,” sources told The Indian Express. A joint working group was constituted on September 30, comprising officials of the central and state governments, to prepare the draft legislation for the Constitutional amendment.

This will delay the GST roll-out further even as Asim Dasgupta, chairman of the Empowered Committee of State Finance Ministers, has already said the new indirect tax regime would not be introduced as scheduled, from April 1 this year. The centre and the states have been locking horns over the amendments, which is the first step towards the implementation of the new indirect tax regime meant to subsume all central and tax levies and reduce the cascading effects of taxes.

Contentious issues such as placing the GST under the concurrent list or in the combined list of the centre and the states still stand unresolved. There are two provisions for the introduction of the GST under the Constitution. One is to put it both under the states and the centre, where the central law prevails over the states. The other is to put it under the concurrent list.

Apart from this, the other hurdle is the creation of a body that will harmonise between the centre and the states on various issues which may arise in the future.

Source: Indian Express, India, dated 09/02/2010