INDIRECT TAXES
| FM to meet CMs today, GST rollout tops agenda Sun, 27 Jun 2010 22:12:49 GMT |
| The Economics Times FM to meet CMs today, GST rollout tops agenda NEW DELHI: Finance minister Pranab Mukherjee will try to allay the fears of states over the goods and services tax, or GST, in his meeting with the chief ministers of western and central states on Monday. The apprehensions of states have emerged as a big concern for the rollout of the new tax regime from April 2011. During his visit, the finance minister will also meet the heads of all public sector banks and financial institutions as the government steps up its efforts towards financial inclusion. Mr Mukherjee will be meeting the chief ministers of Chhattisgarh, Maharashtra, Rajasthan, Gujarat, Madhya Pradesh and Goa. The Centre has been negotiating with the states for the early introduction of GST, but concerns over revenue loss with the proposed tax and compensation has been a bone of contention. The Centre has, however, promised to compensate states in full for any revenue loss that they may incur due the new tax. In an interview with ET, finance secretary Ashok Chawla had expressed hope that the government will meet the deadline. “After finance minister’s announcement that states will be fully compensated, there is a revival of spirit among states,” he had said. The new tax, it is proposed, will replace excise duty and service tax at the Centre and VAT and local taxes at the states’ level. The finance minister will also review the implementation of centrally-sponsored schemes in each state and the credit flow to priority sector areas such as agriculture, credit to weaker sections and micro and small enterprise credit. There are around 29,666 bank branches in the central and west zone, which comprises 34.18% of the total branches in the country. “Banks have a good spread in these areas. There are no unbanked blocks in the central and western zone and almost 47% branches in this zone are in the rural areas,” said a finance ministry official. Mr Mukherjee will also be meeting with the heads of all public sector banks and review their annual performance. “The major focus will be on the financial inclusion plans as the banks have been told to select the required technology and operationalise it by June 15,” the official said. |
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