State FMs to discuss continuation of GST council on October 30

The empowered group of state finance ministers will discuss the constitution of goods and services tax (GST) Council and dispute settlement mechanism at its meeting on October 30.

Earlier, Finance Minister Pranab Mukherjee had said the proposed GST Council would only be a recommendatory body and all decisions would be taken only after consensus.

The states had expressed concern over veto power to the Union finance minister as chairman of the GST Council. Also, the government may come out with another discussion paper on GST after the meeting.

The panel was likely to reach a consensus on major issues at the meeting and place the proposed amendments in the winter session of Parliament, Chairman of the Empowered Group of State Finance Ministers Asim Dasgupta said on the sidelines of an interactive session organised by the Merchant’s Chamber of Commerce.

“Some communication will be there,” he said, when asked if another discussion paper would be released before the winter session of Parliament.

“The two basic issues to be discussed in the meeting on October 30 are GST council constitution and dispute settlement and grievance mechanism,” among other things, he said.

The government hopes to place the proposed amendments in the winter session of Parliament.

However, there are apprehensions over meeting the new deadline to roll out GST by April 2011.

“We are trying hard to reach a convergence. Let the Bill be introduced in the winter session. Then, it will be proper to comment (on the rollout of GST),” said Dasgupta.

Several states, like Madhya Pradesh and Gujarat, had expressed concerns over constitutional amendments, on grounds that it would dilute their fiscal autonomy.

They proposed states should be allowed to levy service tax without the amendment. However, the Centre had rejected the proposal.

“We have reached a good deal of convergence on structure, rates and exemptions. It has been agreed that there will be a higher and a lower rate for goods. We will have the same rates on goods for states and union territories. In services also, it will be the same. The overall tax burden will fall,” said Dasgupta.