'My first priority will be to build consensus for GST'

Q&A with Abdul Rahim Rather, GST panel new head

Empowered Committee (EC) of State Finance Ministers got its new chairman today in Jammu and Kashmir Finance Minister Abdul Rahim Rather. A regular at the Goods & Services Tax (GST) meetings, Rather faces the challenge of bringing together the Centre and the states on many contentious issues of GST. In an interview with Vrishti Beniwal, Rather says building consensus is his top priority. Edited excerpts:  

What will be your key priorities as the new Chairman of the EC?

My first priority will be to build consensus so far as GST is concerned. The ultimate aim is to introduce GST in the country in a timely manner. But before that, passage of the Constitutional Amendment Bill is essential. Till that happens GST cannot move forward. Parliamentary Standing Committee on Finance will submit its report on it soon and then the Empowered Committee will look into it.

What is a realistic deadline for the introduction of GST in your view? Prime Minister Manmohan Singh has said it cannot be introduced by April 2014. Do you agree?

It is possible (to introduce it next year) but the government needs two-third majority for that. If the government gets the required support in Parliament both for the Constitutional Amendment Bill as well as GST legislation, which is then ratified by half of the states, it is possible to introduce the tax reform by April 2014. All political parties need to join hands for that.

Gujarat and Madhya Pradesh are two states which have been opposing the GST. How would you convince them to soften their stance?

They are not opposed to GST. They have some concerns which need to be addressed.

What are the major concerns of the states now?

Compensation for the Central Sales Tax (CST) and also GST are the major areas of concern. States have lost a lot of revenue because of reduction in CST rate from 4% to 2%. Besides, we have to resolve concerns regarding the threshold for levying GST, revenue neutral rate, and dual control among others. These are being discussed by the EC and it is possible to address these isssues.

Your predecessor Sushil Modi had said 80% of the issues regarding GST have been resolved. Do you also hold the same view?

We cannot proceed further without Constitutional Amendment. Power has to be given to the states to tax services and to the Centre to collect excise on areas mentioned in the State List. I think he (Modi) was referring to the issues discussed at the level of the EC. As far as those are concerned he is correct.

EC will leave for a study tour of GST to South Africa this week. Do you plan to implement some of the learnings here after coming back?

We will have a meeting of EC after coming back. We will also hold a meeting with the Union Finance Minister.