State finance ministers to meet FM on GST; 1 April rollout unlikely

The 1 April deadline for the introduction of a comprehensive goods and services tax (GST) looks nowhere near being met, as sharp differences persist between the centre and the states as well as among the states themselves on the modalities and the tax-sharing formula.

Asim Dasgupta, West Bengal finance minister and chairman of the empowered committee of state finance ministers, virtually admitted in New Delhi today that the GST will be delayed, though he refused a categorical comment.

''Together, the empowered committee and finance minister Pranab Mukherjee will announce a new date,'' Dasgupta told reporters. The committee is scheduled to meet the finance minister later today to discuss a date.

But the empowered committee has also strongly criticised 13th Finance Commission taskforce's GST report. They question the methodology applied by the committee to arrive at the 12 per cent revenue-neutral rate.

''It (the rate suggested by the taskforce) does not tally with the estimates made by the government, the National Institute of Public Finance and Policy, and the states. We will like them to review the methodology,'' said Dasgupta.

Given the estimate of the base and the level of central taxes which are intended to be subsumed in GST, the taskforce headed by former finance ministry joint secretary Arbind Modi had suggested a single rate of five per cent for the central GST and seven per cent for states - totally 12 per cent - in its report last month.