'Final date for GST rollout only in December'     

Keeping aside differences over the details of the proposed goods & services tax (GST), the Empowered Committee of State Finance Ministers Asim Dasgupta has finally came out with its first discussion paper on the new tax that seeks to completely reform the indirect taxes regime in India. West Bengal finance minister and chairman of the committee, Asim Dasgupta, acknowledges the differences that have to be sorted out but seems encouraged by the first step. He is now focussing his energies on the work that needs to be done for implementation of the new tax system. Excerpts:

Can we expect the GST to roll out on April 1, 2010, as scheduled?

We will be in the right position to answer this only after we finish work on the draft on constitutional amendments and the draft for legislation and rules required for implementing the central GST and state GST. We expect to finish this by the end of November (2009). The IT infrastructure required for smooth implementation of the GST will be made operational by the middle of January.

Are you saying that the April 1, 2010, deadline cannot be met? Will the central GST and state GST be rolled out at the same time?

What I am saying is that we need a little more time to say when exactly we will be able to implement the new tax structure. The moment we start working on the drafts, progress will be rapid. We will be able to give a date probably sometime in December.

Some state governments have problems with the proposed GST model. What is being done to bring them on board?

There are some differences among states. Each state has its own local problem. We have to recognise these problems. We are trying hard to understand each other’s position. The GST paper shows that states have come somewhere.

If there are a couple of states that refuse to come on board, will it be possible to implement the GST structure without their participation?

At the moment, we are talking to all state governments to resolve the contentious issues.

What kind of compensation package can the state governments expect to in lieu of the revenue loss from GST?

It was decided by the GST panel that the 13th Finance Commission would take a call on the compensation that would be handed out to the states over a period of five years.

What are the products that will be kept out of the ambit of GST?

I cannot share the specifics of the negative list at the moment. However, alcohol, crude oil, petrol and diesel products would be kept out of the GST’s ambit. A decision on natural gas will be taken later.

How will food articles be taxed under the GST regime?

This question again brings us to the subject of the negative list. The decision on the negative list and the rate structure will come later.

Source : Economic Times, dated 11/11/2009