Major breakthrough on GST: Virtually all states on board, says FM Jaitley

Zee Media Bureau

New Delhi: Finance Minister Arun Jaitley on Tuesday said every state has either supported or accepted the idea of the pan-India Goods and Services Tax (GST) except Tamil Nadu, which has expressed reservations.

"So far, every state has given its detailed views on the GST itself. Virtually, every state has supported the idea of GST. Except one state Tamil Nadu, they have made some suggestions which has been taken note of, " FM Jaitley said  after a meeting of Empowered Committee of state FMs on the long awaited indirect tax reform.

"As far as 1 percent additional tax for first 3 years is concerned, I have made it clear that I am flexible on that issue, " added Jaitley.

FM said that issues of dual control and revenue neutral rate will be dealt by the Empowered Committee.

There has been complete consensus on no constitutional cap as exigencies may arise in future to revise the rates, Jaitley said.

The meeting was attended by Finance Ministers of 22 states including West Bengal's Amit Mitra as well as Chief Ministers of Arunachal Pradesh and Meghalaya, deputy CM of Delhi and senior officials of seven others.

The meeting on June 14 and 15 will discuss the model GST law, which will be adopted by the Centre and all states.

FM @ArunJaitley​ briefs press today after a meeting on #GST in which 29 States/UTs participatedhttps://t.co/j7IWmNV0zN — PIB India (@PIB_India) June 14, 2016

The Centre is planning to roll out the indirect tax from the next financial year beginning 1 April 2017, but the GST bill has been pending in Rajya Sabha because of stiff opposition from the Congress party. Once the Constitution Amendment Bill to roll out GST is passed by the Parliament, the Centre and states will have to adopt their own laws to give effect to the new indirect tax regime.

The central GST (CGST) will be framed based on the model GST law. The states will draft their own state GST (SGST) based on the draft model law with minor variations incorporating state-based exemptions.

Besides these two laws, the Centre and states will have to approve the integrated-GST law or iGST, which will deal with inter-state movement of goods. The empowered committee of state finance ministers is headed by West Bengal finance minister Amit Mitra, who took over the chairmanship in February.

The government has proposed to take up the GST Constitution Amendment Bill in the Rajya Sabha in the forthcoming monsoon session of the Parliament. The reform of the indirect taxation was initiated by the Kelkar committee in 2003, following which the UPA government in 2006 proposed the GST Bill.

The GST Constitution Amendment Bill was passed by Lok Sabha in May last year and has been pending in the Rajya Sabha, where the ruling NDA does not have the majority.