GST Empowered Committee Chairman K M Mani today said the new indirect tax regime will boost India's economy and the panel of state finance ministers needs to build a consensus among all states on the contentious matters before April 1, 2016 - the deadline for launching Goods and Services Tax.
Mani, who is Kerala's Finance Minister, said GST is expected to bring in an additional benefit of about Rs 1 lakh crore a year to the country and attempt was on to implement it in such a way that it is more beneficial to all states than the Value Added Tax (VAT) system.
Speaking at a GST seminar, organised by the Confederation of Indian Industry here, he said the new regime will provide energy to businesses and rejuvenate the economy.
"The task now before the Empowered Committee is to build consensus with the states on matters on which agreement has not yet been reached before April 1, 2016, the targeted date to implement the regime," Mani said.
Replacement of the states sales tax by the VAT in 2005 marked a significant step forward in the domestic trade tax in the country, he pointed out adding it contributed for the country's economy.
Similarly, GST is a major change in the country's economy, he said, adding that it would ensure growth in trade, industry, labour and imports, bringing in an additional benefit of Rs 1 lakh crore to the country.
However, he said the main task before the Empowered Committee of State Finance Ministers is to reach agreement on several issues that are pending before it.
Some of the issues that still need consensus are tax structure on inter-state services including transportation and communication, rate of tax on essential commodities, including food products, and system of mechanism to collect tax, he pointed out.
CENVAT, stamp duty, telecom licence fee, electricity charges, central excise duty, entertainment tax, luxury tax, lotteries, betting were some of the items considered to be included in the GST, he said.
However, no total agreement had been reached on whether to include petroleum products and liquor in the ambit of GST, he added.
The government introduced the GST Bill in the Lok Sabha last week amid stiff resistance by several Opposition parties, including Congress, who pleaded for referring it to the Standing Committee.
