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The
governments of Gujarat and Karnataka have expressed
their sense of discomfort with the GST deadline, while
Madhya Pradesh is asking for a standard GST rate of at
least 17 per cent, which is seen as too high.
In the
meanwhile, the Centre and the state governments have
decided that imports will now be brought under the GST
net.
The state
governments will be able to tax imports with the state
finance ministers and the Centre agreeing to bring
imports under the GST net.
Essentially, this means while imports will continue to
attract the basic customs duty, the countervailing duty
(CVD), levied by the Centre to protect domestic industry
from cheap imports, will be subsumed into the GST.
States
already have a four per cent VAT, which operates as a
counterpart to the CVD, but with GST coming in, all of
this will go.
However,
this might be easier said than done, as Gujarat,
Karnataka, and Madhya Pradesh, along with many other
states, have begun to protest on the April 2010 deadline
for bringing in GST.
On his
part, Asim Dasgupta, who heads the empowered committee
of state finance ministers on GST, is trying hard for a
consensus to emerge.
But he is
quick to admit that compensation by the Centre for GST
as well as the reduction in the Central sales tax from
four to two per cent is a sticky issue with states.
Also, lack
of proper data is preventing states to arrive at a GST
rate, which will protect their revenues.
On their
part, the state governments have asked the Centre to
cough up another Rs 11,000 crore just on account of a
cut in CST rates.
All these
ministers will meet Finance Minister Pranab Mukherjee on
October 27. In the interim, they will also try and work
out the framework for constitutional changes necessary
for GST.
But will
there be a consensus on the April 2010 GST deadline?
Source
:
NDTV.com, India, dated 08/10/2009
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