9.1.10

Centre-state meet on GST fails


The centre and states were unable to decide on a new date for the rollout of the goods and services tax and will now meet again by the month end to sort out all contentious issues. “We will meet by the month end and hope to finalise the dates and rates,” chairman of the Empowered Committee of state finance ministers Asim Dasgupta told reporters, after a meeting of the committe with union finance minister Pranab Mukerjee. He said the finance minister has requested for some more time on the issue of GST on account of his preoccupation with the preparation of Union Budget and has requested us to come to him for discussion at a later date within this month. Mr Dasgupta had said earlier that states and the Union finance ministry would announce new dates for the introduction of the comprehensive indirect tax reform after the meeting. Doubts have been raised whether this major tax reform can be implemented in view of the paucity of time. GST was to be rolled out from April 1, 2010. GST, which will replace the major indirect taxes — excise duty, service tax, value added tax and other state taxes — with a single levy, will create a national common market that is at present fragmented along the state boundaries because of multiple taxes levied by the states. On the issue of compensation for the central sales tax, that is being phased out in line with the government’s intent to introduce GST, the centre has proposed that the states accept half of the compensation on account of their revenue loss in the current fiscal.

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