The Finance Minister Mr. Pranab Mukharjee has two major tasks in his hand and if successful handles the both then certainly his name remembered as “Most successful Finance Minister” of India by the coming generations. These two tasks are – DTC and GST.
In case of DTC, the CBDT has issued the revised discussion paper and it has dealt almost all the concerns shown by the stakeholders including the Taxation of investment on EET, capital gain, housing interest, taxation on Non profit organization etc. with very logical and stable manner.
The lawmakers are not showing the same confidence in case of GST- Goods and Service tax because they have not even presented any concrete solution for the hurdles in the road of GST. The centre and the States have different type of stakes in case of GST and in case of rate of tax, dual or single rate of taxation, threshold limit for GST , purchase tax etc. both have the altogether different views and see both individually don’t have power to decide anything.
At the initial stage, the states have been given a wrong belief that their empowered committee will have the supreme say in the matter of GST and on this belief the empowered committee released a discussion paper on GST. The tax payers at the initial stage of release of discussion paper also rely on it in the form that what the law makers have in their mind about the basic format of GST. Even during the first 15 days after release of the discussion paper of GST by the EC, no adverse comments received from the Centre but there after the release of report of 13th finance commission it was clear that the states and the centre have very serious differences on the basics of the GST.
As per the News report, the centre is seriously thinking about formation of a council for the matters connected with introduction of GST and certainly the council having representation from states and the centre have more importance than EC and further the centre want the veto power in this council which is clear indication that the chances of consensus between the states and centre on the very basic issues of the GST are not very bright.
GST is totally different from the VAT and IT-DTC. In the later two cases the ultimate deciding power was known – in the case of VAT the states individually have to decide and in case of IT-DTC, the centre has the power. In case of GST , both centre and states are stakeholders and there is no deciding power hence their agreement on basics should be there to introduce the GST.
The one thing is clear that the DTC will take place of law on the specified date and this will be a first step for the FM but how he will cross the second – the GST , is very interesting to see because the dead line is now coming near .
CA SUDHIR HALAKHANDI