GST roll-out seen feasible by April 2016

The government is looking forward to the implementation of the Goods and Services Tax (GST) from 1 April 2016, as negotiations with states on GST enter a critical stage, a senior revenue department official said today.

Prime Minister Narendra Modi has given directions for implementation of the new indirect tax regime from 1 April 2016.

"The deadline for actual implementation of GST from 1 April 2016, would be feasible. It all depend on how quickly we are able to reach consensus on critical issues," revenue secretary Shakti Kanta Das said at an event in New Delhi.

Early this week, finance minister Arun Jaitley said the constitution amendment bill to give states and the centre equal powers to tax services and production could be introduced in Parliament in the winter session.

The prime minister had met Jaitley on Monday to take stock of preparations for GST roll-out.

The proposed Constitution Amendment Bill to pave the way for introduction of the GST regime, which will subsume most of the indirect taxes at the central as well as states level, was first introduced by the UPA government in 2011.

The GST issue, which has been hanging fire since 2006, is currently stuck at a crucial stage where states have proposed to keep products such as petroleum, tobacco and alcohol out of the ambit  of GST and had demanded the exemption list be included in the Constitution Amendment Bill.

The states have also sought the inclusion of a five-year compensation mechanism for loss of revenue also to be included in the Constitution Amendment Bill.

"The discussions are at a very critical stage and we hope to make very good progress. We are quite optimistic we will be able to reach convergence in the coming weeks or months," Das said, adding, there were four - five issues with the states that are outstanding and on each there have been discussions in recent weeks.

The GST rollout has missed several deadlines because of lack of consensus among states over certain crucial issues on the new tax regime.

Clearance of CST compensation arrears has been a bone of contention between Centre and states, as the states still wait for Rs13,000 crore arrears pending till 2010.