Goods and service tax in Gujarat not before April 2011     

Gujarat government is not fully prepared to implement goods and service tax (GST) in state on April 1, 2010. The government is now likely to implement the new tax regime only on April 1, 2011.

"Technically, we can not implement GST in April next year, and we can not do it in the middle of the financial year. So, April 2011 may see implementation of GST in the state," Saurabh Patel, the minister of state for finance, told DNA.

Currently, Gujarat is getting a revenue of around Rs20,000 crore from value added tax (VAT) which is collected by state government. "If GST is implemented, we will have to give away our powers and autonomy. Centre must ensure that Gujarat government gets revenue of at least Rs20,000 crore after the new tax regime is implemented," said Patel.

The new tax rate should not be too harsh for the consumer, said minister in his speech at Thinkers' Meet, organised by the Gujarat Sales Tax Bar Association on Sunday in Ahmedabad. "The implementation of GST should result in a win-win situation for all parties concerned. An ideal situation would be wherein state government's annual revenue of Rs20,000 crore is not discontinued, the central government has also gained and the consumer is paying less tax," he said.

Patel said Gujarat government can not rely much on compensation. "Even if we agree on giving up our autonomy, we will have to depend on the central government for compensation for which we can not rely on them. In the case of abolishing central sales tax, Centre is yet to pay Rs2,000 crore to us for the financial year 2008-09. And if central government again delays the compensation, we will have to keep on hold each and every development and expansion project in the state," he said, adding that because of this reason only, Gujarat government is looking for autonomy up to a certain extent.

Source: Daily News & Analysis, India, dated 14/12/2009