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Centre expects consensus with states on GST soon, Bill likely in Winter Session

The BilL needs to be passed by a majority of two-thirds in both Houses and by the legislatures in half of the 29 states.

Written by Shruti Srivastava | New Delhi | Published: July 28, 2014 12:56 am

The government is working on introducing the Constitution (115th Amendment) Bill, for the proposed Goods and Services Tax (GST), in the Winter Session of Parliament.

A senior official told The Indian Express that the Centre has already reached out to the states for building a consensus on the Bill and the procedure should be complete in 2-3 months following which the Bill would be tabled in Parliament.

On Friday, finance minister Arun Jaitley had assured Parliament that the government will seek to move the amendments to the Constitution this year itself for implementing the new indirect tax regime.

The BJP in its manifesto had touted the GST as a major tax reform for facilitating industrial growth and improving the business climate in the country.

Earlier, the UPA-II government had introduced the Bill in Parliament proposing a GST council and a dispute resolution panel for fixing the rate of the new tax for both states and Centre and resolving their differences.

The previous government had revised the draft of the Bill four times to accommodate concerns of states.

However, the Bill had received stiff opposition from states including the BJP-ruled states like Gujarat and Madhya Pradesh.

The Bill needs to be passed by a majority of two-thirds in both Houses and by the legislatures in half of the 29 states to become law.
It is vital for GST as it provides power to the Centre to tax beyond factory gate and to states to tax services.

In a meeting with the Empowered Committee (EC) of state finance ministers last month, Jaitley had told the states that their concerns over design of the GST and issues related to compensation for revenue loss on account of rolling out GST and phasing out the central sales tax (CST) would be suitably addressed sooner than later.

He had assured that the states would be given compensation for loss on account of GST roll out for three years beginning the implementation of GST.

The issue of CST compensation, a vexed issue between the Centre and states, will also be resolved, the minister had said.
Further, regarding the design of GST, states are insisting that petroleum and alcohol be kept out of the purview of the new indirect tax regime.

They also want to include a mechanism for compensation in the Bill.

The Empowered Committee has also demanded that the centre’s share of integrated GST should be made a part of the divisible pool between the Centre and the states.

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