KM Mani, finance minister of Kerala and chairman of the empowered committee of state finance ministers, speaks about the challenges being faced by the states as they prepare for the introduction of goods and services tax, in an interview with FE’s Gireesh Chandra Prasad. Edited Excerpts:
Do you think the Constitution Amendment Bill on GST would face hurdles in the Rajya Sabha considering the ruling coalition at the Centre is a minority in the Upper House?
I do not foresee any difficulty in the Rajya Sabha for the Bill to sail through. In case it gets referred to a select committee of parliamentarians, there could be a slight delay. That’s it. We stick to our deadline of April 1, 2016, for GST implementation.
Despite a constitutional guarantee for compensation, many states fear they will suffer revenue loss in the GST regime. Punjab, for example, is asking for the right to tax food grain purchases.
What is the EC’s take on that?
Most of the finer details of GST are yet to be worked out. Some states have pointed out that the central government’s compensation for states’ revenue loss needs to be on a permanent basis. There is a difference of opinion on this. Some states have raised certain specific concerns, especially producing states. I am sure the EC and subsequently the GST Council would iron out these issues.
There is a view that small traders might find it difficult to comply with the requirements of GST, which is administered through sophisticated IT platforms. Do you agree?
We have not received any representation from the trading community. If anything of that sort is brought to our notice, the empowered committee will certainly address that.
The earlier version of the Constitution Amendment Bill had a provision for setting up a dispute settlement authority, which has been dropped in the 2014 version. What is your thinking on the possible ways of inter-state dispute settlement?
Disputes could be settled at the empowered committee or at the GST Council itself. If we need the help of the Union government, we shall seek that. Besides, the GST Council can recommend ways to resolve disputes at other avenues.
By when do you think all states would have the IT infrastructure to migrate to GST?
The EC wants all states to have the IT back bone as early as possible considering the April 1, 2016, deadline. Most states are reasonably well prepared. There are certain deficiencies in some states, which are being rectified. We are also confident that the required IT platform that GSTN (the company set up to create IT systems for registration, return filing, tax payment and refunds) would be ready by the time GST would be introduced. The Centre and states would equally share the cost of this crucial project.