The law ministry is likely to finalise the Constitutional Amendment Bill on the Goods and Services Tax (GST) by next week. It will send draft of the Bill to the finance ministry which will share it with the empowered group of state finance ministers on GST for its feedback.

“We are discussing it (the Bill) with the law ministry. It is in the semi-final stage. Hopefully it will be ready by next week,” said an official in the finance ministry.

The empowered committee will have its next meeting on GST on July 21. The Centre plans to send the draft Bill for consideration of the states before this meeting so that its provisions can be discussed on that meeting and GST is put on the fast track.

The government is trying to get the approval of the states on the draft of Constitutional amendment at the earliest so that the Bill can be introduced in the monsoon session of Parliament likely to begin on July 26.

This is for the first time since the Constitution was enacted that a tax base is proposed to be shared between the Centre and the states. GST’s entry in the Constitution will allow both the Centre and the states to levy tax on the same set of goods and services.

Pranab to meet State FMs on July 21 on GST

Finance Minister Pranab Mukherjee is likely to meet his state counterparts on July 21 to discuss constitutional amendments needed to roll out the proposed GST and the compensation package for the states for the possible loss of their revenue due to this new indirect tax regime.

“The Finance Minister will meet the state finance ministers to discuss compensation packages and constitutional amendment required to implement the goods and services tax (GST),” a finance ministry official told PTI here today.

Before meeting Mukherjee, the empowered group of state finance ministers, headed by West Bengal finance minister Asim Dasgupta, will meet on the same day and discuss the constitutional amendment draft prepared by the law ministry to implement GST besides the compensation package for the states for any possible revenue loss they suffer due to GST rollout.

“We expect the draft constitutional amendment from the law ministry next week to implement GST. Some kind of preliminary approval of the empowered committee of state finance ministers is required (for this draft). For that we would send it to them before the meeting,” the official added.

The finance ministry had explored the feasibility of introducing a Fourth List (Union List, State List and Concurrent List being the other three) in the Constitution that gives both the Centre and the states equal taxation powers, as currently the Centre cannot impose indirect taxes beyond manufacturing, while the states cannot levy service tax. However, the Fourth List idea was dropped later on.

The other option is to allow the Centre and the states to levy GST by amending the Union and State Lists.

The states have already floated a discussion paper on GST, which will replace the excise duty and service tax at the Central level and value-added tax at the state level, besides the cess, surcharges and local taxes.

The GST is scheduled to replace most of the indirect taxes from April 1, 2011.

More Under Goods and Services Tax

Posted Under

Category : Goods and Services Tax (6461)
Type : News (13497)
Tags : goods and services tax (4950) GST (4553)

Leave a Reply

Your email address will not be published. Required fields are marked *