Chance of GST rollout from 2012-13 brightens as states warm up

The Centre on Tuesday softened its stance on the central sales tax (CST) compensation issue, while the states showed some flexibility in discussing the matter with the Union government, thus brightening a chance for the introduction of the goods and services tax (GST) from the next financial year.

The Empowered Committee of State Finance Ministers expressed confidence that the GST regime can come by April 2013. For, “the Bill (for amending the Constitution) is pending before Parliamentary Standing Committee. They will start discussion on it in the second or third week of May,” Sushil Modi, chairman of the empowered panel told reporters after a meeting with Finance Minister Pranab Mukherjee.

 

The Centre was willing to consider the demand of the states with regard to compensation for reduction in CST rate, he added. “We discussed with the finance minister the entire GST in detail, including the CST compensation. He said the chapter of compensation is not closed. He has an open mind about it,” added Modi, also the deputy chief minister of Bihar. The statement from Modi on a new date for the GST rollout came a day before the empowered committee meets here to discuss issues related to the GST and CST besides the negative list for taxation of services. Later in the day, the committee also met industry chambers to share their concerns on the GST.

Today’s developments can be seen in the backdrop of Modi’s meeting with Prime Minister Manmohan Singh about a week ago. Singh called Modi for an exclusive discussion on the GST and asked him to try and build a consensus on the issue so that the regime could be rolled out at the earliest. He told Modi to take “personal interest” in the matter and speak to all the states ruled by non-UPA parties.