Consensus on GST may take time: Pranab

Posted By: Pti
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New Delhi, Jan 24 (PTI) Finance Minister Pranab Mukherjeetoday said the Centre is working at a "political level" withstates for countrywide roll-out of Goods and Services Tax(GST), but it may take some time to arrive at a consensus onthe new indirect tax regime.

"I am hopeful that it would be possible to achieve thesuccess in bringing the consensus though it may take sometime," Mukherjee told reporters here.

Once implemented, GST will subsume indirect taxes likeexcise duty and service tax at the central level and VAT onthe state front, besides other local levies.

"At the political level, we are working on it (GST) toevolve the consensus in close cooperation with the EmpoweredCommittee of State Finance Ministers," Mukherjee said.

The Centre has proposed a three-tier GST structure. Asper the proposal, GST will be levied at two rates on goods --a concessional 6 per cent on essential items and 10 per centfor others -- while services will attract 8 per cent GST.

These will be collected by both the Centre and the states.

The original deadline of April 1, 2010, for roll-out ofGST has already been missed and the Centre has said it willmake efforts to roll it out from April 1, 2011. However, dueto the lack of consensus between the Centre and states on theissue, it is likely this target will also be missed.

The proposal for roll-out of GST, touted as the mostsignificant indirect tax reform since the introduction ofstate-level VAT, has been hanging fire on account ofpersisting differences between the Centre and states on theGST Constitution Amendment Bill.

Amendment of the Constitution is required to enable theCentre to impose tax on activities other than manufacturingand for the states to levy service tax, under the GST regime.

In a meeting of state finance ministers and Mukherjeelast week, the states had asked the Centre to allow them tolevy taxes on 33 services.

Currently, the Centre cannot impose tax beyondmanufacturing activities and states do not have the power tolevy tax on services.

However, after GST is implemented, both the Centre andthe states will have the power to levy taxes on goods andservices.

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