INDIRECT TAXES
| GST discussions in April and rollback dates only after study, FM tells House Tue, 23 Feb 2010 21:54:03 GMT |
| The Economic Times GST discussions in April & rollback dates only after study, FM tells House 24 Feb 2010, 0324 hrs IST, ET Bureau NEW DELHI: The empowered committee of state finance ministers has said it is not feasible to implement the proposed goods and services tax (GST) regime from April 1, 2010, union finance minister Pranab Mukherjee informed the Parliament on Tuesday in a written reply. GST, which would subsume Central excise duty, service tax along with value added tax and other state-level duties, was originally slated to be introduced from the new fiscal. Mr Mukherjee also informed the Parliament that he would meet state finance ministers in early April to the discuss implementation of the GST. “A meeting was held with the state finance ministers on January 28, 2010. It was decided that discussions on GST will be continued in another meeting in early April, 2010,” he said. A joint working group with officials from the central government, some state governments and the empowered committee of the state finance ministers, has been set up to prepare drafts of the Constitutional amendment bill, central GST legislation, model state GST legislation and related rules. Withdrawal of Stimulus The government on Tuesday said it would take a call on winding up the fiscal stimulus measures only after assessing its impact on the economy. “The decision on the roll back of fiscal stimulus measures, including the nature, pace and sequence would be based on the emerging economic situation after careful consideration of the impact of the same on the recovery process,” minister of state for finance Namo Narain Meena said in a written reply to the Rajya Sabha. The Central Statistical Organisation has pegged economic growth at 7.2% in 2009-10 while the growth in the second quarter of the fiscal is placed at 7.9%. “The above two facts indicate that in the current fiscal, the economy is recovering from the slowdown in 2008-09...A significant part of the revival owes to the stimulus packages,” the minister said. The expectation of robust growth has given the government enough room to considering winding up stimulus measures, such as the cut in excise duty and service tax rates. The RBI too has begun winding up its accommodative monetary policy by hiking the cash reserve ratio by 75 basis points in January. It could also hike benchmark interest rates in its new policy in April, in order to curb inflation. In response to another query, the minister said, “the expansionary fiscal stance is a short-term measure to address demand slowdown in the economy and to minimise the adverse impact of the global financial crisis. Once the adverse impact of the global shocks on the Indian economy is overcome, the process of fiscal consolidation would resume.” Mr Meena further said monitoring the emerging macroeconomic situation and calibrating policies to mitigate the adverse impact and restore growth momentum is an ongoing process. Price Rise THE government on Tuesday said a number of factors have contributed towards price rise and it will continue taking measures to tackle the issue in the next fiscal. “Several anti inflationary measures will continue during 2010-11,” finance minister Pranab Mukherjee informed the Rajya Sabha in response to a query. Food price inflation touched 18.65% for the week ended December 12, 2009. In the month of January, WPI inflation touched 8.56% topping the central bank’s forecast of inflation at 8.5% in 2009-10. Mr Mukherjee informed the Parliament that the government has taken a number of steps to contain price rise including exemption rice, wheat, pulses, edible oil and sugar from import duties and permitting import of raw sugar at zero duty under open general license till December 2010. However, there are a number of factors responsible for hardening prices. “The rise in prices is due to a number of factors that include hike in minimum support prices, adverse weather and climate change, increase in crude oil prices and hardening of international prices in some cases. Market expectations and sentiments following drought conditions also play a major role in price rise,” minister of state for finance Namo Narain Meena said in reply to another question in the Rajya Sabha. |
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