FILE: Finance Minister Arun Jaitley (Press Trust of India photo)
New Delhi:
The Centre is said to be close to clinching a deal with the states on its big bang tax reform, the Goods and Services Tax or GST and Finance Minister Arun Jaitley plans to introduce a bill to amend the Constitution for this in the current Winter session of Parliament.
In several rounds of talks, the Centre and states are said to be working on a mutually agreeable structure.
Mr Jaitley met with finance ministers of seven states - Punjab, Haryana, Gujarat, Tamil Nadu, Maharashtra, Karnataka, and Jammu and Kashmir - last evening where a compromise was reportedly worked out. The Centre, sources say, has agreed to keep petroleum goods out of the Goods and Services Tax (GST) Bill, a long-pending demand from the states that had emerged as a major hurdle.The exclusion of petroleum goods from the GST net, though, would be for a limited period till states reach comfortable revenue levels. The Finance Minister also, in a critical concession, reportedly said that the Centre would ensure zero revenue loss to states after the GST comes into play.
The states, in return, have reportedly agreed to entry tax being subsumed in the new tax regime proposed from April 2016.
"The matter (GST) was discussed elaborately. The discussions are moving in a positive direction," Empowered Committee Chairman Abdul Rahim Rather told reporters after the meeting. Concerns of other states have already been addressed.
Talks between the Centre and the states over the GST framework reached a deadlock last week over entry tax and Value-Added Tax (VAT) on petroleum products being included in the new tax regime.
States, which earn over 50 per cent of their revenue from taxes on petrol and other petro products, wanted it to be out of GST so they could continue with levying different tax rates on these products.
States wanted the compensation for revenue loss accruing from the subsuming of all indirect taxes post the rollout of GST to be included in the Constitution Amendment Bill in the three rounds of talks that were held last week.
On the issue of compensation, the Finance Ministry will seek legal opinion on how it can be accommodated in the Constitution Amendment Bill that it wants to bring in the current session of Parliament.
On Monday, Minister of State of Finance Jayant Sinha had said the government expects to table the Bill in the current session.
The GST has been hanging in balance for about seven years now as states are concerned about their revenue losses on introduction of the new tax regime.
In several rounds of talks, the Centre and states are said to be working on a mutually agreeable structure.
Mr Jaitley met with finance ministers of seven states - Punjab, Haryana, Gujarat, Tamil Nadu, Maharashtra, Karnataka, and Jammu and Kashmir - last evening where a compromise was reportedly worked out. The Centre, sources say, has agreed to keep petroleum goods out of the Goods and Services Tax (GST) Bill, a long-pending demand from the states that had emerged as a major hurdle.The exclusion of petroleum goods from the GST net, though, would be for a limited period till states reach comfortable revenue levels. The Finance Minister also, in a critical concession, reportedly said that the Centre would ensure zero revenue loss to states after the GST comes into play.
The states, in return, have reportedly agreed to entry tax being subsumed in the new tax regime proposed from April 2016.
"The matter (GST) was discussed elaborately. The discussions are moving in a positive direction," Empowered Committee Chairman Abdul Rahim Rather told reporters after the meeting. Concerns of other states have already been addressed.
Talks between the Centre and the states over the GST framework reached a deadlock last week over entry tax and Value-Added Tax (VAT) on petroleum products being included in the new tax regime.
States, which earn over 50 per cent of their revenue from taxes on petrol and other petro products, wanted it to be out of GST so they could continue with levying different tax rates on these products.
States wanted the compensation for revenue loss accruing from the subsuming of all indirect taxes post the rollout of GST to be included in the Constitution Amendment Bill in the three rounds of talks that were held last week.
On the issue of compensation, the Finance Ministry will seek legal opinion on how it can be accommodated in the Constitution Amendment Bill that it wants to bring in the current session of Parliament.
On Monday, Minister of State of Finance Jayant Sinha had said the government expects to table the Bill in the current session.
The GST has been hanging in balance for about seven years now as states are concerned about their revenue losses on introduction of the new tax regime.
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