The proposed unified Goods and Services Tax (GST) will not be introduced from April 1 this year as was originally planned, finance minister Pranab Mukherjee said in Parliament on Tuesday. The minister is expected to meet state finance ministers in early April to discuss the implementation of GST.
?A meeting was held with the state finance ministers on January 28, 2010. It was decided that discussions on GST will be continued in another meeting in early April, 2010,? the finance minister said.
He further said a joint working group comprising officers of the Centre, a few states and the empowered committee of the state finance ministers, has been constituted to prepare drafts of the constitutional amendment Bill, central GST legislation, model state GST legislation and related rules. While implementing GST, there are thorny issues that remain between the Centre and states on its structure. The tax base, the compensation package for any revenue loss to states are the main issues in this regard.
Going by the 13th Finance Commissions suggestion, the GST could be rolled out by October 1 this year?half way through the next financial year. The commission has also suggested a corpus of Rs 30,000 crore, spread over 5 years, for compensation to the states on account of GST implementation.
The implementation of the new tax regime would require constitutional amendments like empowering states for levy of service tax, a GST on imports among others.