INDIRECT TAXES
| Finmin offers concessions on new tax plan Wed, 18 Aug 2010 15:37:14 GMT |
| The Economic Times Finmin offers concessions on new tax plan NEW DELHI: Finance minister on Wednesday offered concessions on most major demands by states on legislation needed to allow an ambitious tax reform to take effect from next April. The goods and services tax (GST) regime would replace existing multiple state and federal levies such as excise duty, service tax, and value-added tax, simplifing tax administration, and aiming to curb tax evasion. "The priority for now is the finalisation of draft constitutional amendments so that the amendment bill may be introduced in parliament during the ongoing monsoon session," Finance Minister Pranab Mukherjee told the panel of state finance ministers on GST. After states objected to a clause in the draft GST bill giving the federal finance minister veto power over state tax matters, the finance minister dropped this clause altogether. In a major concession to dissenting states, Mukherjee said decisions taken by a proposed GST council will be taken by consensus. Mukherjee also promised states another revised draft of the GST bill to reflect these concessions. "It is critical for meeting the April 2011 deadline," he said. However, some states, especially those ruled by the opposition Bhartiya Janta Party, wanted one month to consider the draft GST bill which also needs approval from state legislatures before the new tax system can be introduced. "Some states have raised certain objections ... but our target is still April 2011 to implement the GST," Asim Das Gupta, head of the panel told reporters after the meeting. Senior finance ministry officials seemed optimistic about the GST being introduced on time on April 1, 2011. The officials, who did not wish to be named, said that even if the GST bill is introduced in the next session of parliament starting towards the end of the year, the deadline could be met. High expectations rest on GST with business executives and investors hoping it will reduce their average tax burden by eliminating multiple taxes and cut down on corruption and red tape. |
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