‘GST rollout possible next fiscal’

‘GST rollout possible next fiscal’

New Delhi: The government on Friday said goods and services tax (GST) may be rolled out anytime next fiscal even as it misses the 1 April 2011 deadline due to lack of consensus among the states and the Centre.

“GST is a transaction based tax. So, it is not essential for it to start at beginning of the year. It is possible to be introduced in October, November ...," Central Board of Excise and Customs member S. D. Majumdar said on the sidelines of a conference by PHD Chamber.

However, Majumdar said nothing could be said for certain unless there was consensus among the states and the Centre, and the prime reason for the discontent is what the states have called “loss of financial autonomy".

“Without consensus we cannot move forward. There is some apprehension about the erosion of autonomy but even finance minister recently said the Centre, too, is losing out autonomy," he said.

The new tax regime is expected to replace excise duty, service tax on the Centre’s end and VAT on the states’ front, besides local levies, cesses and surcharges.

The first draft on the Constitution Amendment Bill on GST received a setback after being rejected by the states saying it provides a veto power to the Union finance minister in matters relating to state taxation issues.

It proposed setting up a GST Council to take decisions on GST with the consent of the finance minister and a two-third majority of states.

Even the second (revised) draft, which promised to change the structure of GST Council saying the council could take a decision only when there is a consensus, was opposed by some states who wanted to know the clear meaning of ‘consensus’.

The BJP-ruled states and some others, who wanted the word ‘consensus’ to be replaced with ‘consent’, opposed the revised draft and sought time to firm their views. Their comments are expected to be received by 20 September.

On whether the Centre is open to consider yielding some autonomy to states, Majumdar said, “We have to first see what are the objections to the proposals that we have given. We are waiting. By (September) 20th we are expecting the comments."

Finance minister Pranab Mukherjee has regretted failing to table the indirect tax reforms bill in the monsoon session of Parliament, which has resulted in a definite delay in the rollout of GST from earlier scheduled date of 1 April 2011.

GST introduction requires two sessions of Parliament as the Constitution Amendment Bill first needs to be placed in Parliament and then referred to standing committee, and then the finalized form of Bill has to be tabled again.