The Empowered Committee of State Finance Ministers will present its views on the Constitution Amendment Bill for GST before the Parliamentary Standing Committee of Finance tomorrow.
"I will be meeting Yashwant Sinha [Parliamentary Standing Committee of Finance Chairman] tomorrow and will discuss with him views of the Empowered Committee on the Bill," the Chairman of the Empowered Committee, Sushil Kumar Modi, who is also Bihar Deputy Chief Minister, said here today.
The committee today discussed various provisions of the Bill, with the respective state governments giving their views on the issue.
Modi said the finance ministers of various states also discussed matters related with contentious issues like dispute settlement mechanism in the proposed the Goods and Services Tax (GST) regime.
State finance ministers also took up the issue of their revenue loss on account of reduction in the Central Sales Tax (CST).
During the meeting today, the committee also came out with a report on the experiences of the GST team which recently visited Europe. It contained information about the implementation of GST in the EU and other related issues.
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Today, the states also arrived at a decision to levy VAT on sugar and textiles. The Committee also discussed the views of the state governments on online payment of taxes and said that they would also approach RBI so that more banks are allowed to offer facility for e-payment of VAT.
Even though the Constitution Amendment Bill on the proposed GST has been introduced in the Lok Sabha, several states would convey their issues and concerns over the provisions of the Bill before the Parliamentary Standing Committee on Finance, which is studying the bill.
One of the main contentious issues relates to how the Centre-State disputes would be settled. While the bill provides a dispute settlement authority, several states want all the decisions by consensus as is done in the 27-nation European Union bloc.
The Constitution Amendment Bill for roll-out of GST was introduced in Parliament during the last Budget session and has been referred to the Standing Committee on Finance. However, there are several issues which are yet to be resolved between the Centre and the states.
These include provision for states to levy cess in case of natural calamities, their autonomy in matters of taxation, concerns on powers of the proposed dispute settlement authority, and concerns of state governments on loss of revenue on account of reduction in the CST rates.
The CST, a tax on inter-state movement of goods, was reduced from 4% to 3% in 2007-08, and further to 2% in 2008-09 after the introduction of Value Added Tax (VAT).