Centre-states differences persist over key aspects of GST

Differences between Centre and states over some key provisions of the Goods and Services Tax remain, with the Empowered CommitteeThe Empowered Committee of state FMs insisting that threshold turnover for levying GST be retained at Rs 10 lakh and petroleum be kept out of the purview of the new tax regime.

The Empowered Committee of state FMs, which met here today, however expressed hope that the GST could be rolled out by April 1, 2016, notwithstanding the hitches.

Talking to reporters, GST Empowered Committee Chairman Abdul Rahim Rather said that the Centre had written to him suggesting that the threshold annual turnover for levying GST should be increased to Rs 25 lakh from Rs 10 lakh.

The states had in August decided that the threshold be fixed at Rs 10 lakh and had informed that to the Centre.

"In September, the Centre wrote to us suggesting that this decision of the Empowered Committee should be reviewed. The Centre suggested that the limit should be Rs 25 lakh. Even if it is not Rs 25 lakh, Rs 10 lakh limit should be increased.

"But finally the Committee took a decision that they will go by the decision that is already taken that is Rs 10 lakh," Rather said, adding that the final call on threshold will be decided by the GST Council.

The GST will subsume indirect taxes like excise duty and service tax at the central level and VAT on the states front, besides local levies.

The GST Constitutional Amendment Bill, which was introduced in the Lok Sabha in 2011, had lapsed and the NDA government will be required to come up with a fresh bill.

The Finance Ministry is in the process of preparing a Cabinet note on the GST Bill.

States want that petroleum, alcohol and tobacco should be kept out of the purview of GST. The states are yet to receive the draft constitutional amendment bill from the Centre.

"States have already said that petroleum, alcohol, tobacco should be excluded from GST. We are waiting for response from Centre. We have not received the revised draft Bill. We will discuss and offer our comments (after we receive it)," Rather said.