Presenting the 2017 budget, finance minister Arun Jaitley on Wednesday left the excise and service tax largely unchanged, keeping hopes alive for the roll out of the ambitious goods and services tax (GST) regime in July.
“Implementation of GST is likely to bring more taxes both to central and state governments because of widening of tax net. I have preferred not to make many changes in current regime of excise and service tax because the same are to be replaced by GST soon,” Jaitley said.
Describing the GST and demonetisation as “tectonic” policy initiatives, the minister said the GST council, which has representatives from the Centre and states, was ready with recommendations on “almost all the issues”.
His remarks came after Opposition-ruled states such as West Bengal, Kerala and Karnataka had objected to some provisions, threatening to delay the passage of the three GST-related bills.
“A lot of work is left, I have already written to the union finance minister pointing out 13 things that need to be done. So I don’t want to comment whether the July 1 target can be met,” said Amit Mitra, West Bengal finance minister and chairman of the empowered committee of state finance ministers.
“It is my privilege to inform this august House that the GST council has finalised its recommendations on almost all the issues based on consensus and after spirited debate and discussions,” the minister said.
He said discussions were held on the GST rate structure, threshold exemption and parameters for composition scheme and details for compensation to states among other issues.
The government would reach out to trade and industry from April 1 “to make them aware of the new taxation system”, Jaitley said.
“The Centre, through the Central Board of Excise and Customs, shall continue to strive to achieve the goal of implementation of GST as per schedule without compromising the spirit of co-operative federalism,” Jaitley said.
India’s biggest tax reform, the GST, which aims to replace myriad local levies with a single tax, has missed several deadlines both during the UPA and the NDA rule.
Last year, Parliament passed the 122nd constitutional amendment bill but the three bills that will launch the GST are caught in political wrangling.