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Thursday, July 19, 2018

States not hindering GST,Modi to tell corporates

* EC may seek India Inc’s support for CST compensation

Written by Shruti Srivastava | New Delhi | Published: April 17, 2012 1:09:47 am

The Empowered Committee (EC) of state finance ministers has reached out to Corporate India to seek the industry’s views on resolving the stalemate relating to the implementation of the proposed Goods and Services Tax or GST.

According to government sources,the Empowered Committee chaired by Bihar Deputy Chief Minister Sushil Kumar Modi may impress upon the corporate sector the validity of states’ compensation demand for phasing out the Central Sales Tax.

Industry chambers including CII,Ficci and Assocham are scheduled to meet the committee on Tuesday. Besides this,the committee will also take the industry’s views on how to take forward pending decisions on the proposed negative list for services and the Constitution (Amendment) Bill.

When contacted,Modi told The Indian Express,“We have called a meeting to apprise them about the existing situation in GST,the confusions arising due to no time frame for implementation in the Budget,the role of states and Centre in the GST and to make them aware of the roadblocks.” The chambers can suggest steps the committee must take to evolve a consensus.

“It is necessary to dispel the notion that states are acting as stumbling block in the roll out of GST,” Modi said,adding that the message being conveyed was that the states were not moving forward. “We want to explain the chambers the real situation,” he said.

There is confusion regarding double taxation of services and this would also form a part of discussion on Tuesday. There are many services on which states levy value added tax while the Centre has also proposed a tax on the same services. This has left states a worried lot since it will lead to double taxation. Officials from the finance ministry are also likely to attend the meeting,the sources said.

A Ficci official said that discussions would take place on negative list for services and “encroachment upon certain items of states by the centre for taxation”. In its meeting last month,the states had made a case for raising the CST rate from existing 2 per cent to 4 per cent in case of failure by the centre to pay the demanded compensation for phasing out CST. In fact,CST has allegedly emerged as a bargaining point by the states for implementing GST.

Intensifying pressure on the Centre,Modi had written to chief ministers of 17 states to put pressure on the Centre to disburse the CST compensation dues. Finance minister Pranab Mukherjee had earlier told Parliament that the government will not be able to compensate states indefinitely for the losses suffered by them due to CST phase out.

SOS meeting

Empowered Committee chaired by Bihar Deputy Chief Minister Sushil Kumar Modi may impress upon the corporate sector the validity of states’ compensation demand for phasing out the Central Sales Tax

The EC will also take the industry’s views on how to take forward pending decisions on the proposed negative list for services and the Constitution (Amendment) Bil.

There is confusion regarding double taxation of services and this would also form a part of discussion on Tuesday

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