Changing Momentum Of GST:Still More ToDo

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Last updated: 2 Mar 2011

When nothing is going right in the successful implementation of Goods and Services Tax (GST), suddenly a momentum changes in favour of those who are favouring the rolling out of the GST.

The finance ministry is planning to table a Constitutional Amendment Bill in the coming Budget Session of Parliament (second part), which be began on February 21, for introducing the Goods and Services Tax (GST) and from there it would have been referred to the standing committee. While the first part of the Budget session will end on March 16, the second part will be from April 4 to April 21. After all the comments from the parliamentary panel, the bill could have been placed in the winter session in December, 2011.This step would take the central and state governments closer to ushering in a nationwide goods and services tax on April 1, 2012, that will simplify the manner in which corporate, small enterprises and traders will be levied taxes on goods and services. The reform would eliminate multiple indirect taxes levied by states and the Central Government that will not only make life easier for most manufacturing companies but also allow products and services to be priced uniformly across the Country.

In a meeting with the Empowered Committee of State Finance Ministers, Finance Minister Mr. Pranab Mukherjee said that the Centres and States have already taken a lot of time in developing a draft in the rolling out of the GST. “We have missed the timelines twice and it is my earnest request that we move with speed and efficiency and introduce the Constitutional Amendment Bill in the forthcoming Budget Session”.

However, the last meeting of the Empowered Committee of State Finance Ministers in New Delhi also failed to provide any fruitful results. In this meeting, politics comes upfront as the Congress ruled States agreeing with the Centre’s proposal and the BJP ruled states differing with the Centre’s viewpoint. The meeting was held to discuss the revised draft of the Constitutional Amendment Bill. In this draft the Centre proposed to give power to Parliament for constituting the GST council. The GST council would be a recommendatory body and it would give suggestion to the Union and the states on the indirect tax regime.

Mr. Mukherjee also said that the concerns of the states could be heard by the Standing Committee, which comprises members from the ruling party as well as the Opposition and said he would meet the states for a detailed discussion on their views on GST in the second half of the Budget Session. The whole idea is to continue the GST process as well as at the same time try to develop the Consensus between the Centre and the State Governments.

There is no doubt that some progress is there in rolling out of the Goods and Services tax along with DTC from April1,2012 but one thing is certain that being a very complex issue [i.e. Good and Service Tax] , a lot of barriers are still awaiting in its path.

I am team member of a law firm. We are a consultant of Indirect tax.
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Posted: 02 March 2011, last updated 2 March 2011

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