The Union finance ministry is set to make a strong case for the timely introduction of the goods and services tax (GST) when the empowered committee of state finance ministers meets on Saturday.

Although GST is scheduled to be introduced from April 1, 2010, many states like Tamil Nadu and BJP-ruled states led by Chhattisgarh have voiced concerns over its implementation date and on issues such as rate, compensation to states and adequate administrative systems. The Centre plans to soothe these fears at the Empowered Committee (EC) meeting and urge states to stick to the targeted deadline.

In fact, the department of revenue in the finance ministry is finalising its position on the matter and revenue secretary PV Bhide is also expected to take a meeting on it. The EC meeting is also significant as it will begin discussions on the possible rate structures for GST and also other modalities of the tax. The 3 sub committees formed by the EC to study structure for GST will also submit their reports in Saturday?s meeting, which comes after a two month hiatus. While one sub-commitee was studying revenue-neutral rates for the tax, a second panel was finalising the list of commodities that would be exempt and the third was reviewing the phase-out of central sales tax.

?Although there have been some discussions on possible rates for GST, these will start in earnest now that the findings will be before us,? a finance ministry official said. While states have been keen for GST to be levied at about 20%, the Centre has been hoping to have it at a lower rate.

In fact, the possible rate and revenue loss was one of the key concerns expressed by states at the last EC meeting on June 10 and then a pre-Budget meeting with Union finance minister Pranab Mukherjee the next day. If states don?t come on board, it will be a severe setback to the Centre?s plan of having a national GST regime in place from next fiscal. While finance minister Pranab Mukherjee had last month acknowledged this issue, he had expressed confidence that ?It would be possible to introduce GST from next April.?

However, he had also announced that the deadline for introducing the tax would be met. ?Like in value added tax, some states didn?t join in, but joined later, this may happen in GST too. I will try to persuade them,? he had said.