17.1.13

GST snippets



Finance minister P Chidambaram has indicated that he will push ahead with the road map for rolling out Goods & Services Tax (GST) in the Budget and vowed that the Centre will not breach the revised fiscal deficit target set for the current financial year.
The twin statements made during his pre-Budget interaction with state finance ministers were the latest affirmation of the government’s resolve to press ahead with the reform agenda. although the two committees tasked with suggesting GST design and compensation to the states are running behind schedule, raising the prospect of the government missing the April deadline for unveiling the biggest indirect tax reform, Chidambaram is learnt to have told the states that there was time to wrap up loose ends on the new regime.
The panels are expected to submit there reports towards the third week of January and could result in significant changes in the Constitutional Amendment Bill that is currently pending with the parliamentary standing committee.
While the Centre could lay down the roadmap in the budget, states have to agree to the new proposals and the bill will need to be cleared by both Houses of Parliament besides 50% of the state legislatures.
At the meeting, sources said Chidambaram told them that he was ready to include the outlines of the amendment in his budget speech if there was consensus among states.
On the demand for higher compensation for reduction in the Central Sales Tax (CST), states were told that the Centre was open to the idea but it would depend on the fiscal situation. The minister said the Centre was committed to stick to the fiscal consolidation plan and intends to restrict the fiscal deficit to 3% of GDP by 2016-17. He also asked states to give speedy clearance to projects falling in their jurisdictions to speed up investments.
After the meeting, Bihar finance minister and chairman of the empowered committee of state finance ministers Sushil Kumar Modi said all the states demanded compensation for reduction in the CST to 2% from the earlier 4%.

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