Jul 11 2014 : The Economic Times (Bangalore)
IN FOCUS - JAITLEY SIGNALS ROLLOUT OF GST SOON
DEEPSHIKHA SIKARWAR
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NEW DELHI
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Finance Minister Arun Jaitley has strongly signalled that the NDA government will roll out the proposed goods and service tax or GST next year, reassuring states that all their concerns will be addressed.The GST is a single tax that will replace a plethora of indirect taxes including service tax, excise levy, state value-added tax and a number of other local levies, and create a national market in the country. The tax was to be originally rolled out on April 1, 2010 but got held up due to differences between the Centre and the states.
“The debate whether to introduce a GST must now come to an end. We have discussed the issue for the past many years,“ Jaitley said in his maiden budget speech, adding that he would like to get the tax rolling soon.
The Centre is expected to seek an expeditious resolution to the controversial issue of central sales tax compensation that has held up the implementation of GST.
The finance minister said that he would also speak to state governments on inclusion of most items within the ambit of the new tax.
States want to keep petroleum products and entry tax out of the GST net. Industry, however, is batting for inclusion of these items to ensure an effective GST. “I do hope we are able to find a solution in the course of this year and approve the legislative scheme which enables the introduction of GST,“ the minister said, promising to address all concerns of the states.
Many states have been reluctant to ag ree to this reform even as they acknowledge that the GST will streamline indirect tax administration, end harassment of people engaged in business, lower incidence of indirect tax for consumers and yield higher revenues to states.
A study conducted by the National Council of Applied Economic Research had estimated gains of 0.9% to 1.7% of GDP for the economy and similar gains for manufacturing and other sectors.
States are apprehensive that they will lose their fiscal autonomy and also there will be some loss of tax revenues for them. The Centre has in the past promised to compensate states for this loss of revenue. “I assure all states that government will be more than fair in dealing with them,“ Jaitley said.
The Economic Survey had on Wednesday suggested that the government could start by rolling out GST at the Centre.
Experts say Centre can roll out this tax very quickly, from April next year. However, the absence of specific timelines in the budget has disappointed them. “The budget speech shows FM's intent to resolve the GST imbroglio within this year, it needs to be backed by actual steps,“ said Bipin Sapra, partner-tax and regulatory services-indirect tax, EY.
“The debate whether to introduce a GST must now come to an end. We have discussed the issue for the past many years,“ Jaitley said in his maiden budget speech, adding that he would like to get the tax rolling soon.
The Centre is expected to seek an expeditious resolution to the controversial issue of central sales tax compensation that has held up the implementation of GST.
The finance minister said that he would also speak to state governments on inclusion of most items within the ambit of the new tax.
States want to keep petroleum products and entry tax out of the GST net. Industry, however, is batting for inclusion of these items to ensure an effective GST. “I do hope we are able to find a solution in the course of this year and approve the legislative scheme which enables the introduction of GST,“ the minister said, promising to address all concerns of the states.
Many states have been reluctant to ag ree to this reform even as they acknowledge that the GST will streamline indirect tax administration, end harassment of people engaged in business, lower incidence of indirect tax for consumers and yield higher revenues to states.
A study conducted by the National Council of Applied Economic Research had estimated gains of 0.9% to 1.7% of GDP for the economy and similar gains for manufacturing and other sectors.
States are apprehensive that they will lose their fiscal autonomy and also there will be some loss of tax revenues for them. The Centre has in the past promised to compensate states for this loss of revenue. “I assure all states that government will be more than fair in dealing with them,“ Jaitley said.
The Economic Survey had on Wednesday suggested that the government could start by rolling out GST at the Centre.
Experts say Centre can roll out this tax very quickly, from April next year. However, the absence of specific timelines in the budget has disappointed them. “The budget speech shows FM's intent to resolve the GST imbroglio within this year, it needs to be backed by actual steps,“ said Bipin Sapra, partner-tax and regulatory services-indirect tax, EY.
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