Finmin to move Cabinet note on GST on Aug 19

The finance ministry is all set to move the Cabinet note on the draft constitutional amendment Bill for introducing Goods and Services Tax (GST) on August 19 and table the same in this Parliament session.

Determined to meet the deadline for implementing the new indirect tax regime from April 2011, finance minister Pranab Mukherjee recently finalised the time line for moving the Cabinet note on the draft amendment Bill and the date to introduce it in the Parliament.

The empowered committee of state finance ministers on GST will meet in the capital on August 18 and take a final view on the revised draft that has almost addressed their concerns with regard to fiscal autonomy.

Mukherjee in a late night meeting with Central Board of Excise and Customs (CBEC) officials on Friday finalised the time-line and also told his officials that the Bill should be tabled in the Parliament on August 26 or August 27, the last date of this Parliament session, sources told FE.

The Cabinet note after being moved, will take at least two days to be cleared after which it would go for the President?s assent. The President?s assent may also take another two days. After that the Bill can be tabled in the Parliament, an official said.

Though the finance ministry will work in strict time-lines but this seems inevitable as missing to table the Bill in this session may derail implementation of GST by April 2011.

The revised draft of constitutional amendment, may not face any opposition with the states this time as the Centre has already taken a compromise stand?agreeing to the ?consensus method? for arriving at any decision in the GST regime and the GST council would just be a recommendatory body with no binding on the states to follow the council?s decisions.

The first draft of constitutional amendment Bill had irked the states over a special power given to the Union finance minister (veto power) and the a binding to abide by the decisions of the proposed GST council.

The new tax regime will subsume most of the indirect taxes levied by the States like VAT and octroi and also those levied by the Centre like excise and service tax.

The disagreement over veto powers to the Centre and other issues like the GST tribunal had threatened to derail implementation of GST from April 2011. However, over many other issues, like the tax structure, tax base and rates of levy consensus had emerged between the states and the Centre in the last meeting of the empowered committee of state finance ministers.