Orissa may rope in expert to assess revenue impact of GST      

The Orissa government may rope in the services of a public finance expert to assist it in assessing the revenue impact of the proposed Goods and Services Tax (GST).

The expert will also assist the state government in assessing the service tax potential in the state.

Since assessing the service tax potential has remained an area of concern among most of the states, the state government’s move is expected to provide it with some knowledge base.

Though the proposal has not been firmed up yet, Dr Pulin Nayak, a national level public finance expert is being roped in for the purpose, sources said.

A discussion paper and FAQ on GST was released during the recent meeting of the state finance ministers on implementation of the proposed system, but it does not indicate any time frame for implementation of GST.

As it stands now, the implementation is unlikely to start in April 2010, as rates of GST are still under discussion. Since the base rate for states couldn’t be arrived at, the Revenue Neutral Rate (RNR) has not been worked out.

Similarly, all the state governments have sought firm mechanism for compensation as they fear revenue loss after migration to the new system of tax collection.

While states like Madhya Pradesh and Chhatishgarh have expressed their opposition to the GST regime, most of the states have sought reasonable time period for putting in place the IT infrastructure. Add to it, the issue of purchase tax on foodgrains is not yet resolved. In this back drop, the April date line for the new system is likely to be missed, sources said.