State finance ministers meet to discuss RNR

The meeting of the state finance ministers scheduled to be held in New Delhi on November 10, will deliberate on various issues pertaining to the proposed implementation of Goods and Services Tax (GST) from April 2010.

The discussions would centre on the revenue neutral rate (RNR) for different states. A discussion paper and FAQ (frequently asked questions) on GST is likely to be released during the meeting, official sources said here.

The meeting would be chaired by Pranab Mukherjee, the Union finance minister. Prafulla Chandra Ghadai, the Orissa finance minister; J K Mohapatra, the state finance secretary and the state's additional commissioner of commercial taxes (ACCT) are likely to attend the meeting.

The design, procedure, inter-state transit issues and legal changes required for implementation of the new system will also be discussed. It may be noted that a constitutional amendment is required to put the new tax regime in place.

While the Centre will frame the Central Goods and Services Tax , the respective states will have to frame GST at at the state level. GST rules will have to be framed for implementation of the new system. Besides, a mechanism will have to be put in place for compensation to the states.

Since the implementation of GST requires IT infrastructure, training and awareness, the implementation of the proposed GST system may be delayed.

Pranab Mukherjee has already indicated that the proposed GST system may be delayed as a number of issues remain unresolved.

“The meeting will give a clear cut picture about the timing of the implementation of the proposed GST system”, an official associated with the development said.