Even as the the finance minister Pranab Mukherjee on Wednesday sweetened provisions relating to the Goods & Services Tax (GST) to win over states for its timely introduction, some BJP-ruled states are still opposing the new tax regime while many have asked for one month to study the revised GST draft, mainly proposals relating to the GST council and the dispute resolution mechanism.
As a clear consensus eluded the meeting on GST of the Empowered Committee of State Finance Ministers in the Capital on Wednesday, it is uncertain whether Mukherjee will be able to introduce constitutional amendments in the ongoing Monsoon Session.
?For a federal structure, GST is a huge tax reform. There has to be unanimity along with protecting the rights of states autonomy. We have to strike a balance,? said Asim Dasgupta, West Bengal finance minister and chairman of the empowered committee.
When asked whether Mukherjee will table the revised draft in Parliament, Dasgupta said: ?We leave this to the FM. States have asked for one month to go through the revised draft amendments.? However, he added: ?Amendment, changes can be done in the process. Whether the FM tables the Bill is up to him.?
Seeking the support of states for implementation of GST from April 1, 2011, Mukherjee, in his opening speech at the meeting, said the proposed GST Council will only be a recommendatory body and all decisions will be taken by consensus.
Eight states?Madhya Pradesh, Gujarat, Tamil Nadu, Chhattisgarh, Himachal Pradesh, Karnataka, Uttar Pradesh and Uttarakhand?are opposing the revised draft and demanding more time to examine Mukherjee?s offer. ?We are ready but BJP ruled states including UP have asked for one month?s time,? said Haryana finance minister Capt Ajay Singh Yadav
The states had expressed concern over the loss of fiscal autonomy on account of the grant of veto power to the Union Finance Minister as chairman of the GST Council, as proposed in the draft Constitution Amendment Bill prepared by a working group for implementation of the new tax regime. These issues, however, were addressed in the revised draft.
The collective wisdom of the council would be a valuable recourse in benchmarking rates, exemptions, thresholds and other key parameters, Mukherjee said, adding, ?Even if its decisions are not binding, they would be useful as guiding principles which we would choose to ignore or violate only in very grave or exceptional circumstances.?