Pranab woos Oppn, states for rolling out GST

The Centre today sought cooperation of the Opposition in Parliament and states for introduction of Goods and Services Tax from next fiscal, saying the move would help control fluctuation in prices of items including petrol.

"The bill (for constitutional amendments) has to be introduced in this session, has to be examined by the Standing Committee, it has to be ratified by 15 states. Otherwise, there will be another delay... I seek cooperation of the entire House," he said replying to the discussion on a Motion on Inflationary pressure on the economy in Lok Sabha.

He said the empowered committee of state Finance Ministers are meeting on GST today.

"The empowered committee of state FMs, they are meeting... If we can do that not only petroleum products, but also the entire range of products that can be covered will be under (the new tax) mechanism and it will be a win-win game," he said.

He added that the levies on petroleum products account for 34 per cent of states' revenues.

"Petroleum sector is an important revenue yielding measure, 34 per cent of the states' revenues comes from petroleum products. In 2009-10, Rs 72,000 crore was raised by states. I know petroleum prices should be rationalised, but how can we do it?," he said, suggesting that GST would help bring down volatility in prices of petrol in domestic markets.

Mukherjee also sought the Opposition's cooperation for including even petrol in GST.

However, the discussion so far on GST between the Centre and states have excluded petroleum products from the purview of new indirect tax regime.

State finance ministers are meeting here today to discuss the Centre's proposal of a 3-rate structure for roll out of GST from April 1, 2011, which would subsume various indirect taxes.

They will also discuss the constitutional amendments required to roll out this new indirect tax regime, which will replace the excise duty and service tax at the Central level and value-added tax at the state level, besides the cess, surcharges and local taxes.

He asked for collective effort of the Opposition to help him bring the constitutional amendments, reminding that the BJP in its own manifesto in the last Lok Sabha elections had promised to roll out GST.

"If we can do it (introduce GST) then the entire spectrum of services tax, excise and VAT will be brought under the constitutional mechanism. We shall have to do it collectively."

Last month, Finance Minister Pranab Mukherjee proposed a three-rate structure for GST- 20 per cent for goods, 12 per cent for essential goods and 16 per cent for services.

States and the Centre are proposed to equally tax the common base of goods and services.