Govt to decide on 3rd revised draft for GST after states' meet
The Finance Ministry will decide on whether to bring out yet another revised draft of the Constitutional Amendment Bill, needed for the roll out of the new indirect taxes regime GST, after it has received inputs from state finance ministers who are to meet in New Delhi on Monday.
The Finance Ministry will decide on whether to bring out yet another revised draft of the Constitutional Amendment Bill, needed for the roll out of the new indirect taxes regime GST, after it has received inputs from state finance ministers who are to meet in New Delhi on Monday.
The Empowered Committee of state finance ministers on Goods and Services Tax (GST) is slated to discuss the Centre's proposal on the bill and take a view on the second draft.
At its previous meeting on August 18, some states had wanted a month's time to study the revised draft.
Meanwhile, Finance Minister Pranab Mukherjee had said a third revised draft could be prepared to sort out states' concerns.
"We will decide on the issue of third revised draft (of the bill) after knowing the views of state finance ministers," a key official in the Finance Ministry said.
"The state finance ministers would meet on September 20 to discuss the re-revised draft of the Constitution Amendment Bill on GST," the source said.
However, it is widely believed that the meeting is unlikely to yield much results as the BJP-ruled states are firm on their views to oppose the existing structure of the proposed indirect tax regime.
"We do not support the existing structure of GST, as it would hamper the state autonomy. We would oppose it in the present form," Madhya Pradesh Finance Minister Raghavji said.
The Centre had to come out with the second draft of the bill, after the states rejected the first one, alleging that it proposed vesting of veto powers with the Union Finance Minister on state taxation issues.
The first draft had proposed setting up of a GST Council to take decisions on GST with the consent of the Union Finance Minister and a two-third majority of states.
The revised draft, however, said the council could take a decision only when there is a consensus.
However, BJP-ruled states wanted to know the clear meaning of consensus and suggested changing this word with "consent". Both the drafts have also suggested a dispute settlement mechanism.
The Constitutional Amendment bill is required because under the present system, the Centre cannot impose tax beyond manufacturing and states cannot impose service tax. The new GST would be imposed by the Centre and states on the common base of goods and services.
Implementation of GST has already missed earlier deadline of April 1, 2010, and is likely to miss the new timeframe of introducing it from the start of next fiscal.