State finance ministers to meet today on GST
State finance ministers will meet on Wednesday to discuss the Centre's proposal of 3-tier rate structure for Goods and Services Tax (GST), which would subsume various indirect taxes.
They will also discuss the constitutional amendments required to roll out this new indirect tax regime, which will replace the excise duty and service tax at the Central level and value-added tax at the state level, besides the cess, surcharges and local taxes.
The meeting assumes importance as only seven months are left for GST's scheduled implementation from next fiscal, with some BJP-ruled states expressing doubts over the meeting of this new deadline.
GST was scheduled for roll out from this fiscal, but differences between the Centre and states over the rate structure have already delayed the new regime by a year.
Last month, Finance Minister Pranab Mukherjee proposed a three-rate structure for GST -- 20 percent upper levy for goods, 12 percent for lower tax for goods and 16 percent for services.
States and the centre are proposed to equally tax the common base of goods and services.
States are expected to firm up their views on the Centre's proposal on the tax rates.
They have also got the Centre's draft proposal on the Constitutional Amendment Bill required to roll out GST.
"We will discuss the proposals and will meet again on August 4," Empowered Committee of state finance ministers chairman Asim Dasgupta had said, adding that there is consensus between the Centre and states on keeping petrol, diesel, alcohol and electricity out of the ambit of GST.
He further said the Finance Minister has assured the states about the Centre's willingness to go beyond the recommendations of the 13th Finance Commission on compensating states for any revenue loss due to GST implementation.
The 13th Finance Commission has proposed a Rs 50,000 crore compensation package for states for the possible loss of revenue once the GST regime takes effect.
Some BJP-ruled states have expressed apprehensions about the introduction of GST from next fiscal.