Do away with GST council, settlement body: Dasgupta to Centre

In what could delay further the implementation of Goods and Services Tax (GST), state panel chief Asim Dasgupta has asked the Centre to do away with GST council and the dispute settlement body in the constitutional amendment bill.

"Empowered Group of State Finance Ministers Chairman Asim Dasgupta recently met Union Finance Minister Pranab Mukherjee and has submitted a proposal to do away with GST council and the dispute settlement body in the constitutional amendment bill," a source told PTI.

The empowered group of state finance ministers is likely to discuss these two proposals at a meeting on October 29-30.

GST is likely to subsume excise duty, service tax at the Central level, and VAT at states level, besides various other cesses, surcharges and local levies.

The states have differences over the scope and power of the GST Dispute Settlement Authority being proposed. Many states have also been opposing it as they believe it would infringe on their autonomy.

Under the proposed structure, Dispute Settlement Authority would be chaired by a retired judge of the Supreme Court to resolve disputes arising out of the GST regime.

"Eight to 10 states have been opposing the dispute settlement mechanism, including Tamil Nadu and Uttar Pradesh," Madhya Pradesh Finance Minister Raghavji had said.

Besides, introduction of a GST council, proposed in the constitutional amendment bill, has also been an area of conflict.

The first draft had proposed setting up of a GST Council to take decisions on GST with the consent of the Union Finance Minister and two-thirds majority of states.

The revised draft, however, said the council could take a decision only when there is a consensus.

However, BJP-ruled states wanted to know the clear meaning of consensus and suggested changing this word with "consent".

The earlier deadline of implementing GST from April 1, 2010, was missed due to differences between the Centre and the states over the GST structure, and it is also likely to miss the April one, 2011 deadline.