Mukherjee to discuss GST roll-out with state finance ministers
03 Jun 2009
Finance minister Pranab Mukherjee has convened a meeting of state finance minister on 11 June for pre-budget consultations on the roll-out of the goods and services tax (GST). The meeting is expected to discuss the issues that have to be sorted out ahead of the GST roll-out.
The GST, proposed to be implemented from 1 April 2010, will replace excise duty and service tax at the centre and VAT at the states level.
Stakeholders like traders expect the coming union budget to propose some concrete measures on implementation of the GST. But, with no consensus on its rates, GST roll-out is likely to take more time than expected. The state governments are also yet to rationalise the tax structure.
Though the imposition of VAT has helped raise revenue, tax rates vary from state to state. Even the definition of goods varies from state to state. Experts have also pointed to many shortcomings in the draft of VAT.
It is also likely that the government may go in for phased implementation of the GST in case the system is not ready for complete rollout as per schedule.
The main debate relating to the introduction of GST in India was whether to go for a single unified GST or a more feasible dual GST model. The empowered committee of state finance ministers has accepted the recommendation of its working group on a dual GST. The report has also been forwarded to the finance ministry for consideration.
The ministry, in turn, has forwarded it to the 13th Finance Commission for its views. The Finance Commission, on its part, started engaging the chambers of commerce and select trade associations to ascertain their views and identify challenges and concerns over the GST model.
The report of its working group, however, is not yet released to the public.
West Bengal finance minister Asim Dasgupta heads the empowered committee of state finance ministers on implementation of the GST. Besides state finance ministers, Mukherjee has invited representatives from the financial sector in an effort to bring out an all-inclusive budget.
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