Pranab says political consensus must for GST rollout

Finance Minister Pranab Mukherjee today said political consensus was a must for implementation of the Goods and Services Tax, a new regime that will subsume taxes such as excise, service tax, value-added tax and state levies like octroi.

The government is targeting to roll out GST on April 1 next year, though some reports suggest that with consensus on the structure of the new regime eluding, the launch could be deferred.

The introduction of GST needs constitutional amendments.

To see the amendment through, “a two-thirds majority is needed in both houses (of Parliament),” Mukherjee said.

The government was planning to introduce the amendments to the current session of Parliament but it appears to be a tall order now, with the session likely to end on August 31.

Last week, state finance ministers called on Mukherjee to discuss their views on the draft amendments and provision for compensation for any likely losses to the states after the new tax system took effect.

The Centre is now likely to come out with a third draft on GST after states raised concern that taxes levied by local bodies, including those on entertainment and amusement, will be subsumed by GST.

States have also objected to the Centre’s financial autonomy and veto power on GST matters.