New Delhi: The Union government wants a single tax slab under the proposed goods and services tax (GST) regime, according to a paper published on the finance ministry’s website on Monday.
It also wants alcohol, petroleum, natural gas and electricity to be brought into its tax base.
The ministry’s paper contains a list of comments on the proposals unveiled by the states in their November blueprint.
The paper had been released to the states during their meetings in New Delhi on GST earlier this month, but had not been made publicly available at that time.
The paper showed significant differences between the Centre and the states on the proposed GST architecture, beginning with the number of tax slabs.
Model view: Finance minister Pranab Mukherjee. Indranil Bhoumik / Mint
New Delhi’s position is far closer than that of the states to a model advocated by a task force set up by the 13th Finance Commission (TFC).
In addition to advocating a single tax slab, which keeps down the tax rate, TFC’s task force had also suggested bringing in petroleum products, alcohol, electricity, purchase tax (which is levied by some states on foodgrains) into the GST tax base. TFC had recommended 12% as the revenue-neutral rate for GST, which was later rejected by the states.
The paper, however, sheds no light on bringing stamp duty on real estate into the GST architecture, a move recommended by TFC’s task force.
Mint had on 8 January reported talks between the Union government and the states on GST were deadlocked as the states felt the TFC task force December report was a veiled attempt to push them into an unacceptable position.
P. Chidambaram, then finance minister, had said 1 April 2010 would be the deadline to roll out GST. Since then, finance minister Pranab Mukherjee has indicated the deadline cannot be met as there is no consensus between the Centre and the states on GST architecture.