Last-ditch bid to table goods and services tax bill on

The Centre is making a last-ditch effort to roll out goods and services tax (GST) by the deadline that it has set—April 2011.

Within five days of their last meeting, chairman of the empowered committee on goods and services tax (GST) Asim Dasgupta dropped into the North Block that houses the finance ministry yet again on Wednesday to meet Union finance minister Pranab Mukherjee for a discussion on the redrafted Bill on constitutional amendment. Dasgupta is the West Bengal finance minister.
Finmin is in the process of redrafting the constitutional amendment to give more leeway to the states.

Recently, states had objected to the veto power of the Centre in the proposed GST legislation.

Subsequently, the FM had said that he had no intention of becoming a ‘super finance minister’, and his ministry began redrafting the constitutional amendment to dilute the veto power clause.

The next meeting of the GST Empowered Committee is scheduled for August 18, when all the state finance ministers would discuss the reworked constitutional amendment.

That will leave the government with just about a week to introduce the GST Bill in this session of Parliament, which ends on August 27.

Mukherjee had indicated earlier that if the draft Bill for the ambitious indirect tax reform cannot be introduced this session of Parliament, it would not be possible to roll out GST by April 2011.

Mukherjee is scheduled to leave for Bhutan for a Saarc finance ministers’ meeting on August 23 for two days.

Meanwhile, the FM will meet leaders of other political parties to seek consensus on GST. Earlier, Mukherjee had met BJP leaders to discuss GST issues.

After his meeting with Mukherjee last Friday, Dasgupta had said, “this is the closest to convergence”, but he had refused to commit whether GST could keep to the government deadline.

In a meeting of the Empowered Committee early last week, several states rejected the draft constitutional amendment Bill related to GST in its present form.

The main objection of the states was that the draft Bill gave veto power to the union finance minister in state subjects, and the states feared losing their financial autonomy. States are demanding dilution in the provisions of the Bill.

Among the states which have reservations over the Bill are Madhya Pradesh, Gujarat, Tamil Nadu and West Bengal.

In July, the Union finance ministry had proposed a three-tier rate structure for GST —- 12% for essential goods, 16% for services and 20% for goods. GST is aimed at replacing the excise duty and service tax at the central level and value-added tax at the state level.