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A council of state
finance ministers could serve as the forum. In addition,
while octroi is currently not part of GST ambit, the
Centre will try and ensure that it is bought into the
net eventually.
The GST regime is being put together by an empowered
committee of state finance ministers headed by Asim
Dasgupta, West Bengal’s minister of finance and excise.
The Union finance ministry has representation on the
committee, which released the first draft paper on GST
for public consultation on Tuesday.
A key aim of the proposed mechanism will be to ensure
that there are no unilateral deviations from the agreed
GST rate, as has happened in some instances in the
existing value added tax regime.
“Whenever we make legislation there is a need for
someone to oversee it. That is the thinking. No final
decision has been taken as yet. But, everyone wants a
mechanism so that the rules of the game are laid down
and not broken,” said Sumit Dutt Majumdar, member,
Central Board Of Excise and Customs.
The draft discussion paper attests to this. “Special
attention would be given to the formulation of a
mechanism for upholding the need for a harmonious
structure for GST along with the concern for the
autonomy of states in a federal structure”, it says.
At another place, the draft says an “appropriate
mechanism that will be binding on both the Centre and
states would be worked out whereby the harmonious rate
structure, along with the need for further modification
could be upheld, if necessary with a collectively agreed
constitutional amendment”.
A joint secretary in the finance ministry, who did want
to be named, said that the contours of the forum are
being worked out to ensure that any future modifications
to GST framework would be carried out only through it.
The ministry is discussing the nature of powers that
this body would have and whether it can exercise some
sort of “over-riding authority” over state or Central
legislative decisions with regard to GST.
Tax experts say such a mechanism would mean that
taxpayers can look forward to some stability in future
GST tax rates.
Though GST is almost certain to miss the original 1
April 2010 target date, the constitutional amendment for
the introduction of GST is mentioned in the list of
business for the winter session of Parliament.
The finance ministry official said the draft of the
amendment is ready and is currently being vetted by the
law ministry. On Tuesday, Dasgupta had announced that
the draft will be ready by 15 November.
The official also said work on a uniform point of
taxation was under way. This is a crucial aspect because
the existing taxes that are to be subsumed under GST are
levied at different points in the supply chain. He added
that octroi, which is currently not part of the proposed
framework, would eventually be included in the ambit of
the tax “over a period of time”.
Source :
Livemint,
India,
dated
12/11/2009
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