Confident of GST from next fiscal: FM

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SME Times News Bureau | 22 Apr, 2015
Finance Minister Arun Jaitley on Wednesday said he was optimistic that the pan-India Goods and Services Tax (GST) will be implemented from April 1 next year, with the mood among the states quite positive now over the benefits of this unified regime.

"We are trying our best to work up to an endeavour where, with the support of IT backbone which has been created, we will try and maintain the target date of April 1, 2016. We are, as of today, quite optimistic," Jaitley told media persons here after meeting finance ministers of the various states.

"Today the positives are that states are quite determined. They see the obvious benefits of the Goods and Services Tax. It is a genuine relationship between the Centre and the states. Broadly, the approach of the states and the Centre are converging in the same direction."

The union finance minister, who addressed the first meeting of the Empowered Committee of State Finance Ministers on Goods and Services Tax under its new chair, Kerala Finance Minister K.M. Mani, also said that the proposed regime will go a long way in creating a single market in India.

"It is going to be a win-win situation for all. We will go ahead with the constitutional amendment in the current session of parliament. Thereafter, there will be three legislations, which the empowered committee will work on," the finance minister said.

The panel, he added, will also take up the suggestions of some sub-groups.

"The Bill has already been introduced. It is a constitutional amendment. It will need the support of two-thirds of members of both houses of parliament," said the finance minister, as his party-led government has been appealing to the opposition to ensure the smooth passage of the GST bill.

Earlier, Mani had told reporters here that there was no "obstinate opposition" adopted by any state to the proposed new tax regime and that a consensus will certainly be built to ensure its implementation from April next year.

The union cabinet last month approved payment of compensation to states for the loss they were expected to incur on account of reduction in the central sales tax (CST) from 4 percent to 2 percent for three years from fiscal 2010-11.

The sources said that based on preliminary estimates, Rs.33,000 crore appears to be payable to states and union territories for the entire period and settling these claims will help create an enabling environment for rollout of the GST regime.

The states want petroleum, alcohol and tobacco to be kept out of the purview of the GST.

Seen as key to facilitating industrial growth and improving the business climate in the country, the GST bill needs to be passed by a two-thirds majority in both houses of parliament and by the legislatures of half of the states in the country to become law.

By subsuming most indirect taxes levied by the central and state governments such as excise duty, service tax, VAT and sales tax, the Goods and Services Tax proposes to facilitate a common market across the country, leading to economies of scale and reducing inflation through an efficient supply chain.