Source: Economic Times
Government today said it was hopeful that the much-delayed Goods and Services Tax (GST) bill will be passed during the ongoing Budget Session.
Government had introduced the Constitution Amendment Bill, 2014 in Lok Sabha in December last year to facilitate introduction of the new indirect tax regime in the country.
Replying to questions in Rajya Sabha, Minister of State for Finance Jayant Sinha said the government proposes to take up the bill for consideration and passage in the current session.
“Hopefully, we will do it in the Budget Session,” he said.
GST is expected to improve generation of the revenue of the States.
However, due to shift from origin-based to destination- based indirect tax structure, some states might face drop in the initial years.
“To help the states in this transition period, the Centre has committed to compensate the states for all the losses suffered by them on account of implementation of GST for a period of five years on a tapering basis,” Sinha said.
When asked that Gujarat had earlier opposed the GST but was now in its favour, the Minister said Gujarat was a manufacturing state and had issues regarding GST which was a destination-based tax and not origin-based.
“In December last year, two meetings were held with State Finance Ministers…to resolve the contentious issues hampering introduction of GST,” he said, adding the bill was introduced after the sides reached a “broad consensus”.
The Minister also said the Centre has agreed to compensate the states and Union Territories for the losses incurred on account of reduction in Central Sales Tax (CST) from 4 to 2 per cent for 2010-11, 2011-12 and 2012-13.
The compensation for the three fiscals is proposed to be released in phases, in 2014-15, 2015-16 and 2016-27, he said.
Government has earmarked Rs 11,000 crore in the Budget towards CST compensation.