The Empowered Committee of State Finance Ministers on Goods and Services Tax (GST) chaired by Bihar Finance Minister Sushil Modi, on 19 August, requested central government to adopt more flexibility in its approach to ensure timely introduction of GST.
Modi said 'The central government has to be flexible and will have to address all the concerns of the state governments.' He said the panel was hopeful to meet the deadline of April 1, 2012 for introduction of the proposed indirect tax reforms.
The introduction of the GST, which will include central and state taxes such as excise, custom, service, sales and VAT, has been pending for years in parliament due to lack of agreement between central and state government over the issue of structure. This is the fourth draft of GST.
Earlier three draft of GST has been rejected after many state governments raising concern over the issue of its structure and autonomy of state government for charging taxes. The main resistance is coming from BJP ruled sates such as Gujarat, Madhya Pradesh, Chhattisgarh and Himachal Pradesh.
In this budget session of the Parliament, the GST Constitution Amendment Bill was introduced and then it was referred to a Parliamentary Standing Committee on Finance. Under the chairmanship of Sushil Modi, it was the first meet of Empowered Committee of State Finance Ministers on GST. In July, Sushil Modi was elected as the Chairman of GST panel.
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