In a fresh development for the long pending Goods and Services Tax (GST) issue, Former Revenue Secretary Sumit Bose, who is also a member of the Expenditure Management Commission, underscored that Finance Commission was well equipped to be involved in the exercise of compensating states for revenue losses following implementation of the Goods and Services Tax (GST).
He also added that a new commission could be constituted a bit early to decide on the compensation and the rights to do so lied with President of India, who if wished to could set up a commission even earlier to produce a report in five years to look into the GST compensation issues.
Finance Commission usually is constituted every five years to recommend devolution of taxes between Centre and states. The commission, which was 14 th one, was last set up by Union Government in January, 2013 under former Reserve Bank of India (RBI) governor Yaga Venugopal Reddy.
However, Revenue Secretary has sought the earlier constitution of Finance Commission to address the long pending issue related to GST, which is proposed to be implemented by April 1, 2016. The UPA government, back in 2011, introduced a Constitution Amendment Bill in the Lok Sabha to pave the way for introduction of GST. But, lack of consensus on compensation to states on revenue loss has delayed its implementation.
