New Delhi: The Empowered Committee of State finance ministers will submit its first draft to the Centre on the proposed Goods and Services Tax next week, undeterred by speculations that the implementation of the new tax regime may be delayed.
The first discussion paper on Goods and Services Tax (GST) would be submitted to Finance Minister Pranab Mukherjee by the Empowered Committee of State Finance Ministers on November 10 and then placed for public comments.
The preparations for the implementation of the direct tax regime is on, even though there could be delay in its introduction from scheduled date of 1 April, 2010.
Even Mukherjee had recently said, “I am trying to stick to the time schedule, but I will not be surprised if there is slippage of a few months.”
When asked about the finance minister’s comments on the issue, empowered committee chairman Asim Dasgupta had said, “Our collective target is 1 April, 2010, and on this we will have discussions with the Finance Minister.”
Some states like Madhya Pradesh and Gujarat have suggested that there should not be any hasty implementation of GST, which would do away with most of the indirect taxes at the Centre and states.
“There is a case for it getting delayed. There are many issues which have to be solved, many complications which are also there,” Madhya Pradesh Finance Minister Raghavji said after a meeting of the Empowered Committee on GST.
Raghavji said there should not be a hurry to implement GST as this is a radical reform in the tax structure.
The Empowered Committee has already constituted a working group on suggesting Constitutional amendments and model GST Act.
GST would scrap most of the indirect taxes at the Centre like excise and service tax and others at the states like VAT, octroi and others.
However, the discussion paper would deal with the overall structure of the tax regime and may not talk about the rates.
Infact, sources said there has been some consensus at the states level on the structure of the tax regime, while there are differences over the rates.
The discussion paper may not even mention the goods and services to be covered under the new tax, the sources said.
They said this issues would be proposed at later stage. In fact, the rates would be decided towards the end, after a decision is reached on the coverage of the tax.
States have already decided that there would be two main rates of GST, besides a special rate on precious metals. The Centre is yet to take a call on the issue.