‘GST not possible from Apr 1 as states yet to reach consensus’     

Finance minister Pranab Mukherjee said that although there has been considerable progress towards implementing the Goods and Services Tax, it will not be possible for the government to introduce it from April 1, 2010 .

“I am quite sure that it will be possible for us to introduce GST at an appropriate time. The empowered committee of finance ministers of states headed by Asim Dasgupta is trying hard to reach a consensus,” he said.

The earlier target of April 1 deadline for implementation of GST, aimed at simplification of India’s revenue system, broadening tax base and minimise exemptions, had already run into trouble following opposition from different states.

Earlier, the finance ministry said that the tax burden on people will come down by 25-30% with the introduction of the proposed GST.

Asim Dasgupta, finance minister of West Bengal, had maintained that the government would lose considerable revenue initially with a number of state and central taxes getting subsumed in GST and with abolition of central sales tax and Cenvat. But he had also said that a higher degree of collection is expected to compensate the loss in less than a year’s time.

Present at the 23 rd Industrial India Trade Fair organised by the Bengal National Chamber of Commerce and Industry, Mukherjee asked for a fiscal consolidation in the country.

He said that the projected fiscal deficit, as has been announced in the budget, is around 6.8% of GDP. “We cannot live in this level of fiscal deficit. For 2010-11 fiscal deficit should be around 5.5% of the GDP and for the year 2011-12 it should not be more than 4%.”