New Delhi: Finance Minister P Chidambaram Friday hoped that the Constitutional Amendment Bill to implement the Goods and Services Tax regime (GST) will be passed by March 2013.
Addressing the Consultative Committee Meeting of the Finance Ministry, Chidambaram said he is "hopeful that the GST Bill would be passed before the end of the current financial year".
Implementation of Goods and Services Tax (GST), which will subsume most of the indirect taxes, has missed several deadlines.
Chidambaram said the GST would help put in place an effective and efficient tax system which is friendly and fair to the taxpayers.
"Though there are still some issues relating to GST and its Network (GSTN) to be resolved, yet they are not insurmountable," he said.
The meeting, which was attended by Members of Parliament and secretaries in the Ministry of Finance, also discussed the issues relating to delay in the implementation of the GST.
The members highlighted the need to resolve the issue of loss to states on account of reduction in the Central Sales Tax (CST) rate.
"...Firstly the issue of loss to the States be settled to the satisfaction of all States before we march forward. This is causing delay on the part of the States in accepting GST and this uncertainty may be settled once for all," the members said.
The CST is collected by the Centre and distributed among states. As a pre-cursor to GST, Centre and States in April, 2007, had agreed to phase out CST over a period of three years and in line CST rate was reduced to 3 percent and then to 2 percent. The Centre had already compensated states' for losses up to 2010-11.
As the Centre refused to go on compensating the states for delay in implementation of GST, states argued that when it was decided to phase out CST, it was presumed GST would be implemented from April, 2010.
A Parliamentary panel is scrutinising the Constitution Amendment Bill on GST which will usher in a new indirect tax regime. The panel is likely to submit its report in the monsoon session of Parliament.
The members of the consultative committee also suggested that decision making process of the GST Council be made more practicable by providing decisions with two-third majority of the States rather than on consensus basis.
Similarly, issues relating to dispute settlement mechanism and exclusion of certain products from the GST system, among others, were also raised during the discussion.
First Published: Friday, August 24, 2012, 19:14