States reject draft Constitutional amendment bill on GST

States reject draft Constitutional amendment bill on GST

States on Wednesday opposed a draft bill to amend the Constitution, a measure proposed by the Centre for rolling out GST, in its present form as it provides veto power to the Union Finance Minister in matters relating to state subjects.

The opposition came on a day when the Union Finance Minister Pranab Mukherjee sought states' cooperation in introducing the new indirect tax system from next fiscal.

"This proposed draft Constitutional amendment bill related to Goods and Services Tax (GST), in its present form is not acceptable to the states," Asim Dasgupta, Chairman of the Empowered Committee of State Finance Ministers on GST, told reporters after a meeting of the panel.

He said states are against infringement on their financial autonomy and have certain reservations on the draft bill's provisions for the GST Council and the GST Disputes Authority.

"States in general have reservations about the Union Finance Minister having any veto power on state GST. Union Finance Minister, of course, would have an exclusive authority with respect to central GST," Dasgupta said.

He said states also feel that GST Disputes Authority should not find a place in the Constitutional amendment bill and may be incorporated in GST legislations.

"So how to handle a situation where state GST and central GST would be there will have to be appropriately and acceptably handled," he said.

Dasgupta said states want to sit down with Mukherjee as soon as possible but states need a little more time.

States are, however, acceptable to the bill's provisions of giving power to levy tax in the concurrent list.

"That part of the Constitutional amendment suggested is acceptable to states, but not the bill as a whole. States have reservations," Dasgupta said.

To a query whether states position will delay introduction of GST from next fiscal, he said, "I did not say that."

In Parliament, Mukherjee sought the Opposition parties' help in Parliament and states cooperation for constitutional amendment bill to roll out GST from next fiscal.

This new indirect tax regime 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.

Last month, Finance Minister Pranab Mukherjee proposed a three-rate structure for GST -- 20 per cent for goods, 12 per cent for essential goods and 16 per cent for services.