New Delhi: Amid hopes of long pending Goods and Services Tax (GST) bill getting passed in Rajya Sabha in the next Parliament session, state finance ministers on Tuesday deliberated on the model GST law at a two-day meeting begins today.
After the first day of meeting, Finance Minister Arun Jaitley said that all states except Tamil Nadu backed the GST bill.
“So far, every state has given its detailed views on the GST itself. Virtually, every state has supported the idea of GST. Except one state Tamil Nadu, they have made some suggestions which has been taken note of”, said FM Jaitley.
“As far as 1 percent additional tax for first 3 years is concerned, I have made it clear that I am flexible on that issue”, added Jaitley.
FM said that ssues of dual control and revenue neutral rate to be dealt by the Empowered Committee.
There has been complete consensus on no constitutional cap as exigencies may arise in future to revise the rates, Jaitley said.
FM Jaitley is participating in the meeting of empowered committee of state finance ministers and try to iron out differences over the new regime that will subsume all indirect taxes and create one national market under the GST.
The meeting on June 14 and 15 will discuss the model GST law, which will be adopted by the Centre and all states.
The Centre is planning to roll out the indirect tax from the next financial year beginning 1 April 2017, but the GST bill has been pending in Rajya Sabha because of stiff opposition from the Congress party. Once the Constitution Amendment Bill to roll out GST is passed by the Parliament, the Centre and states will have to adopt their own laws to give effect to the new indirect tax regime.
The central GST (CGST) will be framed based on the model GST law. The states will draft their own state GST (SGST) based on the draft model law with minor variations incorporating state-based exemptions.
Besides these two laws, the Centre and states will have to approve the integrated-GST law or iGST, which will deal with inter-state movement of goods. The empowered committee of state finance ministers is headed by West Bengal finance minister Amit Mitra, who took over the chairmanship in February.
The government has proposed to take up the GST Constitution Amendment Bill in the Rajya Sabha in the forthcoming monsoon session of the Parliament. The reform of the indirect taxation was initiated by the Kelkar committee in 2003, following which the UPA government in 2006 proposed the GST Bill.
The GST Constitution Amendment Bill was passed by Lok Sabha in May last year and has been pending in the Rajya Sabha, where the ruling NDA does not have the majority.