Finance Minister Arun Jaitley’s plan to introduce Goods and Services Tax (GST) Constitutional Amendment Bill in the winter session of Parliament, may hit a road block with persisting differences between Centre and states over some key provisions. The empowered committee of state FMs after its meeting has insisted that threshold turnover for levying GST be retained at Rs 10 lakh and petroleum be kept out of the purview of the new tax regime. However, the committee expressed hope that the GST could be rolled out by April 1, 2016, notwithstanding the hitches.
The states had in August decided that the threshold be fixed at Rs 10 lakh and had informed that to the Centre. But Abdul Rahim Rather, chairman of Empowered Committee said that the Centre had written to him suggesting that the threshold annual turnover for levying GST should be increased to Rs 25 lakh from Rs 10 lakh. Rather said that finally the Committee took a decision that they will go by the decision that is already taken that is Rs 10 lakh. The Empowered Committee also reviewed the revenue neutral rate for the GST, comprising C-GST and S-GST, as suggested by a GST sub-committee, which had suggested S-GST rate at 13.91 percent and C-GST rate at 12.77 percent.
As regards the items exempted from the purview of GST, the Empowered Committee suggested that they should be mentioned in the Constitutional Amendment Bill. States want that petroleum, alcohol and tobacco should be kept out of the purview of GST.
The GST whose rollout has missed several deadlines because of lack of consensus among states over certain crucial issues on the new tax regime, which will subsume indirect taxes like excise duty and service tax at the central level and VAT on the states front, besides local levies. The Centre is planning to provide Rs 13,000 crore on account of CST compensation to states for dues till March 2010 and is likely to seek Parliament approval for the same in the ensuing Winter session beginning November 24. The GST Constitutional Amendment Bill was introduced in the Lok Sabha in 2011, had already lapsed and the government is required to come up with a fresh bill.
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