GST (goods and services tax) advent gives Centre room for hike in excise duty
In spite of the Union government relenting on central sales tax compensation to states, those with a strong manufacturing base such as Gujarat protested at last week's deliberations of state finance ministers in Orissa that the tax proceeds on interstate trade going to the consuming state was not fair on them.
The other major issues on which a consensus is vital for Chidambaram to be able to introduce a revised GST Bill in Parliament in the monsoon session is a Centre-state deal on a revenue-neutral rate of GST and dual-centre state controls.
Observers feel that there could indeed be an announcement on the transition to GST in Budget 2013-14, although it is unlikely that the rates would be announced. The states have secured a favourable view form the Centre on their having the flexibility to move rates within a narrow band for items of local importance and considering revenue exigencies.
Chidambaram, sources said, is likely to make “positive noises” about the proposed unified indirect tax regime. Keen to revive the economy, the finance minister is using his negotiating skills for a grand political give-and-take
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