GST: State Finance Ministers’ panel to meet on June 14-15

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The black clouds around GST implementation are set to clear in the coming months with the empowered committee of state finance ministers set to meet in Kolkata on June 14-15. The upcoming meeting is expected to discuss a draft GST model law.

This will be the first time that West Bengal Finance Minister Amit Mitra will chair an Empowered Committee meeting after being appointed as the head of this panel in February.

This meeting assumes importance as it comes on the heels of the West Bengal Chief Minister Mamata Banerjee throwing a lifeline to the Constitution (amendment) Bill (GST Bill), stating that she would stand by it, in the current form.

The Centre is now pinning its hopes over introducing GST—billed as the biggest tax reform undertaken in the country—from April 1 next year.

There is strong chance of the Constitutional (amendment) Bill getting Parliament nod in the upcoming monsoon session with Mamata Banerjee backing this reform.

After the Bill passage by Parliament, a majority of the State assemblies will have to ratify it for the Constitutional amendment to be a reality.

A Constitutional amendment is required as the Centre currently does not have the power to levy tax at the retail stage. This power is a must for the dual-GST design to get implemented.

The upcoming Empowered Committee meeting may also discuss thorny issues such as the proposed additional 1 per cent tax on inter-state sales—a proposal that is opposed by Congress. This additional 1 per cent tax is also seen as Centre’s attempt to pacify some manufacturing intensive states that are opposed to GST rollout. India Inc is also not in favour of the additional 1 per cent impost, stating that it could have a cascading impact.

Discussions may also be taken up on the Congress demand of putting the GST rate in the Constitutional (amendment) Bill. There is also no consensus yet on the ideal dispute settlement mechanism under the proposed GST framework.

Source:http://www.thehindubusinessline.com/economy/gst-state-finance-ministers-panel-to-meet-on-june-1415/article8709994.ece

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