Pranab desires GST rollout together with DTC

Pranab desires GST rollout together with DTC

New Delhi: With the introduction of proposed GST all set to miss the timeframe of April one, 2011, the government on Tuesday expressed desire to roll it out together with DTC from 2012-13.

Addressing a seminar on Goods and Services Tax (GST), finance minister Pranab Mukherjee, however, admitted that there are some problems in the way of implementing the new indirect tax system .

He said issues relating to constitution amendments required to roll out the new indirect tax system remain to be sorted out with states.

Mukherjee said the Centre is willing to consider phased roll out of GST and hence suggested three-year time frame to ultimately roll out one GST rate for all goods and services.

“I also desire to simultaneously roll out GST (along with DTC)," the finance minister said at a seminar organised by government auditor Comptroller and Auditor General of India (CAG).

DTC refers to Direct Taxes Code, which is slated to replace archaic Income Tax Act, from 1 April, 2012.

GST, on the other hand, is expected to replace state-level VAT and excise duty as well as services tax on the Centre’s front, besides local taxes, cesses and surcharges.

The finance minister said the revised DTC Bill will be tabled in Parliament after standing committee gives its recommendation and hoped that it would be implemented from 1 April, 2012, as scheduled.

However, the roll out of GST has already missed the earlier deadline of 1 April, 2010, while the government’s keenness to implement it from 1 April, 2011 is also all set to be missed.

The finance minister admitted some problems relating to constitution amendment Bill remains to be thrashed out with states.

The Empowered Committee of state finance ministers has not come out with any consensus view on the Centre’s proposal on constitution amendment bill for roll out of GST.

Some states, mainly BJP-ruled and a few others, oppose the Centre’s proposal to have a GST council which will be empowered to effect changes in the indirect tax system.

The council is proposed to be headed by finance minister and all states are suggested to be its members.

The finance minister said in multi-party, multi-ethnic country like India, divergent views are bound to occur and hoped that consensus would be found in Empowered Committee over the issue.

The division was so much, that the last meeting of the committee held earlier this month skipped the issue of constitution amendments altogether.

Constitution amendments are required in GST since the Centre cannot impose tax beyond manufacturing, and states cannot levy service tax under the present scheme of things.