GST: Jaitley to meet state finance ministers tomorrow

Finance Minister Arun Jaitley will meet his state counterparts on Wednesday to discuss the roadmap for rolling out Goods and Services Tax from April 2016.

Jaitley would chair a meeting of the Empowered Committee of state finance ministers. Later, the state ministers will discuss amongst themselves various issues relating to the implementation of the new indirect regime, sources said.

The government plans to get the Constitutional Amendment Bill on GST passed in the ongoing session of Parliament.

The Bill was introduced in the Lok Sabha in December.

The Centre is working towards addressing concerns of all states for rolling out the GST on the scheduled date.

Certain states have argued that the implementation of GST would be beneficial for consuming states, while for their manufacturing counterparts like Maharashtra and Gujarat it could be a challenge.

The Centre and the states are also working on a new Revenue Neutral Rate, which is currently pegged at 27 per cent.

RNR is the one at which there will be no revenue loss to the states after GST implementation.

The recalculation of RNR is necessary as at present it does not take into account the taxation of petroleum products as also the 1 per cent additional tax which states can levy as part of the GST Bill.

The newly selected chairman of the Empowered Committee of State Finance Minister K M Mani had earlier this month said that a consensus would be built among states for rolling out of GST by April 2016 as there is no ‘obstinate opposition’ from any state.

Jaitley had last week said that the implementation of the landmark GST regime would increase India's gross domestic product by 1-2 per cent.

A single rate GST will replace central excise, state VAT, entertainment tax, octroi, entry tax, luxury tax and purchase tax on goods and services to ensure seamless transfer and end of ‘inspector raj’ as well as ‘tax on tax,’ he had said.

Image: Illustration by Uttam Ghosh/Rediff.com