Hope to roll out GST soon: Finmin

Finance Ministry today expressed hope that Goods and Services Tax regime, the constitution amendment bill for which has been stalled in the Rajya Sabha where ruling NDA is in minority, will be rolled out in 2016.
"The journey towards GST has been long. We will have to wait and see what will be the outcome, whether it will be passed in this session or in the coming Budget Session, but I can say with full confidence that GST is a thing which is going to be reality very soon," Special Secretary in the Ministry of Finance Rashmi Verma said at an event organised by industry body PHDCCI.

"We have set the goal of rolling out GST in the year 2016," Verma added.
The Congress has been stalling the passage of the Bill.
Stating that the Finance Ministry is trying to prune exemption list, she said: "We have to move away from exemption regime otherwise it will lead to cascading effect."
Verma said that under GST the regime there will be common portal managed by the GST Network.

Speaking at the event, the Central Board of Excise and Customs Chairman Najib Shah said after implementation of GST in 2016, there are bound to be legacy issues for quite some time and the industry needs to be prepared for that.

The government proposes to roll out new indirect tax regime GST from April 1, 2016. While the Constitution Amendment Bill is pending in the Rajya Sabha, the Centre is working on the administrative preparedness for smooth roll-out of the indirect tax regime.
Besides the Constitution Amendment Bill, the Centre and state will have to pass their own GST legislation, the model for which is being finalised by the Centre.
(REOPENS DEL 18)
"The indirect tax regime that we are planning, the rate of taxation on such products which are going to be environment unfriendly would be distinct from the normal rate of taxation. This is one of the proposals being discussed," Jaitley had said.

As per the proposals, a state can be compensated if the revenue under GST falls short of the average tax earnings in the best three years out of the past five years.
Second, of the five years, two outliers are left out and an average is taken. If the revenue under GST is short of this, then states get compensated.
Third, a base year can be fixed and a particular growth rate decided for all states. If the revenue falls short of that, then the state gets compensated. The base year would be 2015-16.
Another suggestion was on a fixed rate of revenue growth and give compensation, he said.

So far, as many as 6 issues have been settled by the GST Council, including finalisation of rules for registration, rules for payments, returns, refunds and invoices.
In the first meeting, the Centre and states had reached an agreement on keeping traders with annual revenue of up to Rs 20 lakh out of the new national sales tax ambit that will subsume all cesses.
It also resolved issues over dual control over small traders, and decided that states will have exclusive control over all dealers up to a revenue threshold of Rs 1.5 crore in a year.
A mechanism will be worked out for traders above Rs 1.5 crore to ensure a dealer is regulated either by the central government or the state and not both.