Virtually all states have supported the idea of GST except the southeastern Indian state of Tamil Nadu which has “some reservations”, the Indian Finance minister Arun Jaitley said on Tuesday after a meeting of Empowered Committee of state FMs on the long awaited indirect tax reform.
He said however that there was “no deadline as such” for the implementation of the Goods and Services Tax which aims to subsume a string of state and central level levies.
The Indian government had earlier targeted to roll out the nationwide single tax regime from April 1, 2016 but the Constitutional Amendment Bill on GST has been stuck in the Rajya Sabha due to opposition by the Congress party.
“Virtually all the states have supported the idea of GST on Tuesday barring Tamil Nadu which has expressed some reservations. TN has offered a few a suggestions which have been noted by the committee,” Jaitley told reporters on the first day of the two-day meet.
The meeting was attended by Finance Ministers of 22 states including West Bengal’s Amit Mitra as well as Chief Ministers of Arunachal Pradesh and Meghalaya, deputy CM of Delhi and senior officials of seven others.
Stating that this was a record attendance of FMs, Jaitley said that every state has given detailed views on GST.
Chairman of GSTN and Revenue Secretary Hasmukh Adhia were also present.
Jaitley said the Lok Sabha had approved the GST Bill while it was pending before the Rajya Sabha.
“The first thing which will have to be done is to pass the Constitutional amendment which has to be then ratified by the states. Then Parliament will have to pass the CGST Bill and states the SGST Bills” he said.
Interesting, Tamil Nadu Chief Minister Jayalalithaa and Prime Minister Narendra Modi are scheduled to meet in Delhi on Tuesday wherein she is expected to take up with him a host of state-related issues including the Formation of Cauvery Management Board and Cauvery Water Regulation Committee.
Jaitley said the states’ fear of loss of revenue for the first five years had also been addressed.
“The Centre will compensate the loss and there should not be any cause for worry,” he said.
On the contentious issue of the Constitutional cap on the GST rate, the finance minister said: “There is a complete consensus on that, there should not be any such ceiling as exigencies may arise in future. Now it is left to the GST council.”
On the issue of additional 1 per cent tax as demanded by the producing states, he said the Centre was flexible on the matter. As GST is a consumption-based tax, the producing states had been demanding this extra tax.
Regarding the future roadmap, Jaitley said: “We will try our best to bring the Constitutional amendment in the monsoon session of Parliament. Then the CGST and SGST legislations will be put in place.”
On calculation of the revenue neutral rate (RNR), he said Mitra will again convene a meeting of the Empowered Committee in July and the Chief Economic Advisor would give a presentation.
About dual control on tax rates by the Centre and states, he said it was again up to the committee to see that it was harmonious and there was no conflict. “It will be again discussed in the next meeting.”
The next meeting is likely to be held in the second week of July, Mitra said.
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