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The empowered committee
of state finance ministers will release the first
discussion paper on the proposed goods and services tax
(GST) on Tuesday, exactly five months before the
Centre’s original target date for a nationwide roll-out
of the tax.
The paper, to be followed by another technical paper on
the indirect tax by Finance Commission Chairman Vijay
Kelkar, will provide some clarity on the structure of
GST as states would want it.
Finance Minister Pranab Mukherjee will meet the state
finance ministers tomorrow to discuss GST before the
Bill seeking constitutional amendment to the indirect
tax structure is tabled in Parliament. The government
may want to present it to the House in the upcoming
winter session as it is running against time to meet the
April 10, 2010, deadline though Mukherjee indicated
recently that there might be a delay in introduction of
GST owing to a lack of consensus among states on the
likely structure of the proposed tax. The government
would also have to resolve the issue of compensation to
the states before it moves ahead with GST.
A constitutional amendment requires the approval of
two-thirds majority in Parliament after which the state
assemblies have to approve it. “The process cannot be
completed in five months,” admitted a senior finance
ministry official while stating that his ministry was in
talks with the law ministry to speed up preparation of
the Bill.
The discussion paper will detail how GST will be
collected. It may not have GST rates or items to be
covered under different slabs. The paper is expected to
throw light on the treatment of sectors like real
estate, education, health and items like petrol, alcohol
and tobacco.
The Centre and the states also have to decide on who
will administer the new GST. According to sources, it
could be a joint body, with representatives from the
Centre and the states. The Centre may, however, have its
reservations on this.
Source :
The Business Standard,
India,
dated
10/11/2009
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