The government is likely to miss the April 1 deadline to introduce the Goods and Services Tax (GST), and a decision on a fresh date is expected tomorrow.
"Tomorrow we will discuss the new date for introduction and compensation formula to the states with the Union Finance Minister," Empowered Committee of State Finance Ministers chairman Asim Dasgupta said here today.
Dasgpupta, who is also the finance minister of West Bengal, said, "together (the empowered committee and the Union Finance Minister) we will announce a new date," Dasgupta told reporters after a meeting of the state finance ministers here today who were discussing a revenue neutral rate for the GST.
The state finance ministers will meet Finance Minister Pranab Mukherjee here tomorrow, Dasgupta added.
The government had proposed to introduce GST, which will do away with most of the indirect taxes at the Centre and the states, from April 1, 2010, but this date is set to be missed, as so far no consensus has been arrived at on the modalities of revenue sharing among the Centre and the states as well as on the date of its nationwide roll-out.
The delay is also caused by statutory and implementational reasons as new tax regime requires some Constitutional amendments and many steps by all the 32 states and union territories.
The BJP-ruled states which met here yesterday have also opposed the implementation of the new indirect tax regime from April as many contentious issues regarding the interest of the states have not yet been resolved.
Madhya Pradesh, Rajasthan and Tamil Nadu too had earlier called for delay in the introduction of the new indirect tax regime. However, industry chambers earlier this week had called for its introduction as soon as possible.
While the states have come out with discussion paper on the GST, the exact rates for the new tax are yet to be decided. However, a taskforce constituted by the 13th Finance Commission has suggested a single GST rate of five per cent for the Centre and seven per cent for the states.
The empowered committee was also submitted a report by the NIPFP (National Institute for Public Finance and Policy) taskforce on GST on which Dasgupta said, "we have reservations over the recommendations of the taskforce about the entire approach to GST. We would like them to review the methodology."
When asked about the recommendations of the 13th Finance Commission taskforce, Dasgupta said he would urge them to review their methodology as it does not tally with that of the states.
The GST is expected to replace a slew of indirect taxes such as the excise duty, service tax at the Central level, and VAT at state level, besides surcharges, cesses and other local taxes.
