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Speaking
at a CII function, revenue secretary PV Bhide said
on Wednesday that most states have agreed to a
common GST rate which would have two components --
central and the state GST. On the state GST, states
have agreed to have a single tax rate, unlike VAT
where different states have different rates.
This removes a major roadblock and would
considerably help the government's commitment in
implementing GST from April 1, 2010.
Bhide said there would be no different GST rates
this time as all state finance ministers have
reached a consensus in this regard. Though there may
be some commodities like tobacco and liquor where
states may like to have a separate structure, that
too will be with the consent of the empowered
committee, he added.
The new GST structure will streamline the movement
of goods across the country with single tax system
by abolishing the current multiple tax structure
which has central excise, state VAT and service tax
-- that totals above 30%.
In June, after pre-budget consultations with the
Union finance minister, the chairman of the
empowered committee of state finance ministers, Asim
Dasgupta, who is the West Bengal FM, had said that
he would try and get all state finance ministers
approve a single rate of GST by August when they are
meeting next.
Dasgupta had said that all issues on the GST front
would be sorted out with states and the new tax
regime will be rolled out as per schedule on April
1, 2010.
Some of the BJP-ruled states had expressed their
unwillingness to have a common GST stating that they
would incur heavy losses. States like Madhya Pradesh
and Chhattisgarh fear they would lose massive
revenue once GST is implemented and it would lead to
prices of essential commodities rising phenomenally.
However,
the Centre and the industry want this to be
implemented soon as it will not only improve the tax
collection of the government but will also simplify
the complex and multiple tax structure across the
country.
Source :
Times of India - India,
dated 16/07/2009
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