State Finance Ministers' panel head Asim Dasgupta today met Finance Minister Pranab Mukherjee to find a common ground on the proposed constitutional amendment bill for roll out of Goods and Services Tax from next fiscal.
The meeting assumes significance given Mukherjee's reassurance to states that he did not intend to become a super Finance Minister -- an allusion to the veto power to the Centre under the proposed GST regime.
"This has been a very useful meeting with the Union Finance Minister aimed at convergence on issues relating to constitutional amendment for GST. This is the closest of convergence," Dasgupta told reporters after the meeting.
On Wednesday, the Empowered Committee of State Finance Ministers on Goods and Services Tax (GST) had rejected a draft constitutional amendment bill prepared by the Centre on the ground that it gives the Union Finance Minister a veto power on state taxation issues.
"This proposed draft Constitutional amendment bill related to GST in its present form is not acceptable to the states," Dasgupta had said.
He had said states are against infringement on their financial autonomy and have certain reservations on the draft bill's provisions for the GST Council and the GST Disputes Authority.
"States in general have reservations about the Union Finance Minister having any veto power on state GST. Union Finance Minister, of course, would have an exclusive authority with respect to central GST," Dasgupta said.
Yesterday in Parliament, Mukherjee had said," I have no intention of becoming the super Finance Minister to interfere with the state GST."
"They (states) will have their rights and I shall have my rights...They have a responsibility to their states. That basic structure cannot be altered", he had said.
The Centre, he had added, was waiting for the views of the Empowered Committee of State Finance Ministers on the proposed constitutional amendments, necessary to implement the GST, a tax regime that will subsume various levies like excise, service tax and VAT.
To a query whether states will agree to the request of Mukherjee that petroleum products be included in GST to curb volatility in their prices, Dasgupta said today, "Only after discussing this with state finance ministers in the Empowered Committee, I can comment on it."
The deadline of implementing GST from this fiscal has already been missed due to differences between states and the Centre over GST structure. The new deadline is April one, 2011.
Mukherjee had made a case for introducing the bill in the current session of Parliament to avoid delays.
Constitutional amendment bill is required to give powers to states to levy service tax and the Centre to impose tax beyond production stage.
