‘Constitution has to be amended for timely implementation of GST'     

An early amendment to the Constitution is needed for timely implementation of the proposed Goods & Services Tax (GST), said Dr Asim Dasgputa, West Bengal Finance Minister, and also Chairman of the Empowered Committee.

“The draft legislations for Central GST, State GST and Inter-State GST are at advanced stage but without necessary amendment to the Constitution, there will be no progress in this regard,” said Dr Dasgupta while addressing the 91 {+s} {+t} annual general meeting Calcutta Paper Traders Association here on Saturday, adding, “the issue of Constitutional amendment is now before the Union Law Ministry”.

GST is due to come into force on April 1, 2010.

Dr Dasgupta said the there would be provisions both in the amendments to the Constitution and draft legislations for ensuring “uniformity of rates and autonomy of the States.”

The Empowered Committee, he said, is all for online system for administering the proposed GST. “There will be e-filing and e-returns,” he said suggesting that the proper infrastructure must be in place,” he said.

In West Bengal, 200 special kiosks would be set up to help tax payers in executing e-filing and e-returns, he said, emphasising that the online system was needed to cut out intermediaries between the payers and the collectors of tax. He, however, indicated that manual filing of tax return might be allowed to continue up to one year after the introduction of GST but not after that, he said.

The first discussion paper on GST, he pointed out, had been released and the views on the paper were being obtained from various sectors. “The traders have reacted favourably to it and my interaction with the cross-section of industry too has been encouraging,” he said

While several State-level and Central taxes would be subsumed in the proposed GST, some might persist. For example, many States mobilised huge revenue from purchase tax on agricultural products. Purchase tax in those States, therefore, might continue for some time. Also, way bill would be allowed to continue for a while, he added.

As for rates, his view was that there would be two rates, standard rates and lower rates and the sum total of it will be lower than at present. The government revenue will increase due to better compliance as there would be no set-off unless the tax had already been paid, he observed.

Source: The HinduBusinessLine, India, dated 13/12/2009