Jaitley to meet state FMs tomorrow on GST

Finance Minister Arun Jaitley will tomorrow meet his state counterparts to iron out the 'challenges' in rolling out the Goods and Services Tax (GST).

"The meeting would discuss some of the challenges that the states see at this point of time", Minister of State for Finance Jayant Sinha told reporters on the sidelines of Delhi Economics Conclave here today.

"On GST we are working on variety of discussions with the states. The legislative aspects of the GST are complicated, they have to be approved by the states. CST compensation is one of the item which is under discussion," he said.

The Centre is working towards rolling out the GST from April 1, 2016, and is in discussion with states to insulate their revenues from the impact of the GST.

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

Sinha said once the issues are resolved the Centre can come up with the legislative calender.

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.

States have been demanding that petroleum, alcohol and tobacco be kept out of the purview of the GST.

The GST roll out has missed several deadlines because of lack of consensus among states over certain crucial issues on the proposed new tax regime.

On easing restrictions on gold imports, Sinha said the intention of the government was to enable the jewellery sector function efficiently.

"The current account deficit and foreign exchange reserves are in much more comfortable position now. The rupee is stable," Sinha added.

The CAD, which is the difference between inflow and outflow of foreign exchange, moderated to 1.9% of GDP ($17.9 billion) in April-September period of current fiscal.

It was 3.1% ($26.9 billion) in the corresponding period last year.

The government had last month scrapped the 80:20 scheme for gold imports under which at least 20% of the imported gold had to be mandatorily exported before bringing in new lots.

Gold imports jumped 280% to $4.17 billion in October, as per the latest trade data. The in-bound shipments touched 95 tonnes in September this year as against 12 tonnes a year ago.