Finance Minister Pranab Mukherjee today regretted that despite his best efforts he failed to table the much touted indirect tax reforms Bill, for introducing the Goods and Services Tax (GST), in the monsoon session of Parliament.
As a result, he said, GST is unlikely to be implemented from the scheduled date of April 1, 2011.
"I had tried my best to introduce the Constitutional Amendment Bill for GST in the last Monsoon Session of Parliament itself. But for certain reasons beyond my control it could not be tabled in the last session," Mukherjee said at a meeting with officers of revenue department.
He further said that GST is unlikely to be introduced from the scheduled date of April 1, 2011, as the Constitution Amendment Bill was not tabled in the monsoon session.
"Since we could not place the Bill in the last (Monsoon) session, it may not be possible to introduce GST from April 1, 2011, because GST legislation, both at the Centre and the States, can be undertaken only after the Constitutional Amendment," he added.
The BJP-ruled states, along with a few others, have been opposing the revised draft of the Constitution Amendment Bill on GST released last month and sought time to firm their views.
The earlier draft was rejected by the states on account of the proposed vesting of veto powers with the Union Finance Minister on state taxation issues.
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The first draft had proposed setting up a GST Council to take decisions on GST with the consent of the Union Finance Minister and a two-third majority of states.
The revised draft, however, said the council could take a decision only when there is a consensus.
However, BJP-ruled states wanted to know the clear meaning of consensus and suggested changing this word with "consent". Both the drafts have also suggested a Dispute Settlement Mechanism.
Mukherjee had said a third revised draft would be prepared to sort out states' concerns.
GST is expected to replace excise duty, service tax on the Centre's end and VAT on the states front, besides local levies, cesses and surcharges.
Mukherjee, however said, there should not be any let up in the ongoing work relating to GST.
He asked his officers to start dialogue with the state authorities, as a way of familiarisation, because they will have to work in tandem when the Central GST and State GST come into effect.
On Direct Taxes Code (DTC) Bill, which was introduced in Parliament in the monsoon session, Mukherjee said, "This is the first step towards implementation of DTC. It will come into effect from 1st April, 2012."
He added that the time available after passing the DTC by Parliament and till it comes into effect is to be used for developing the required systemic support and for education and training to employees and taxpayers.
"The available time window should be used effectively for a smooth transition to DTC taxation regime," Mukherjee said.
The government introduced the DTC Bill in Parliament on Monday, which would replace the archaic six-decade old Income Tax Act.