With finance minister Pranab Mukherjee set to enter Rashtrapati Bhavan and some states sticking to their stand on the Goods and Services Tax (GST), the rollout of the new tax regime is likely to be delayed further.
Speaking to FE, chairman of the parliamentary standing committee on finance, Yashwant Sinha said the new finance minister will take some time to acquaint himself with GST-related issues, so ?things are bound to get delayed.?
The committee is currently vetting the GST constitutional amendment Bill and is likely to submit its report to Parliament before the monsoon session.
One of the state finance ministers, on the condition of anonymity, said it is unlikely GST could be implemented before the 2014 Lok Sabha elections. ?Mukherjee had been trying to build consensus between states and the Centre for several years. If he becomes President, the process will have to start from scratch.?
On Friday, the chairman of the empowered committee of state finance ministers, Sushil Modi, met the standing committee members to present the states’ views before the Bill is finalised. Sources say states like Gujarat and Madhya Pradesh continue to oppose the GST structure as they fear losing their autonomy. Besides, the majority states have opposed the inclusion of the dispute settlement authority (DSA) in the Bill.
DSA, as proposed in the Bill, would deal with grievances of the Centre and the states with regard to GST. The body would consist of a chairperson and two other members. The chairperson will be a Supreme Court judge or a high court Chief Justice, while the members will be persons of ?proven capacity and expertise in the field of law, economics or public affairs?.
States also want the GST council to decide on the compensation to states, if any, after GST is introduced. The council would be headed by the Union finance minister with MoS for finance and state finance ministers as members.
A few states have recommended bringing petroleum products under GST ambit, which was kept out of the purview of the Bill. The move is positive as the industry is demanding minimum exemption in the GST. In the Bill, crude petroleum, diesel, petrol, aviation turbine fuel, natural gas and alcohol for human consumption have been kept out.
The GST is unlikely to be implemented from the next fiscal even if the modified GST constitutional amendment Bill is introduced the monsoon session. This is because the legislative process will take some time. After the constitutional amendment Bill is passed by a two-third majority in both the Houses, it needs ratification from at least half of the states.