Drill starts to meet GST deadline
New Delhi, July 22: The Centre and the states have already initiated measures to meet the April 1, 2016, deadline to roll out the goods and services tax (GST), the finance ministry today said.
The select committee of the Rajya Sabha today submitted its report to the House on the GST constitution amendment bill and it is likely to be taken up for consideration and passage in the ongoing monsoon session of Parliament.
"Administratively, we are taking all steps, both the Centre and states, to meet the April 1, 2016 deadline. The efforts of the central and state governments would be to have a reasonable rate of GST so that it is a successful experience for the whole country," revenue secretary Shaktikanta Das told reporters here.
The select committee has endorsed almost all the provisions of the bill, including the demand of political parties to give five-year compensation to the states for revenue loss.
However, the panel has called for diluting the levy of 1 per cent additional tax by states on the inter-state supply of goods.
The committee, headed by BJP's Bhupender Yadav, has suggested that the government should clarify that the additional tax will be applicable only when the supply of goods is in exchange of money.
This will ensure that companies will have to pay the tax only when they sell the goods to a buyer and not when they move goods from one warehouse to another.
Though this falls short of industry's demands for doing away with the additional levy, the committee's recommendation will offer some respite to companies.
The government had included the 1 per cent tax on the supply of goods for two years in the constitution amendment bill to bring on board manufacturing states such as Gujarat that had expressed concerns over revenue loss from GST because of the destination-based nature of the tax reform.
The proposal has faced opposition from both within and outside the government because it will distort GST and have a cascading impact on prices.
Das told reporters the empowered committee of state finance ministers has already set up a sub-committee to look into ways to minimise the cascading effect of the additional levy.
According to the bill, states can levy the additional tax for a period of two years, or for a period as decided by the GST council.