FM: No time-framing to table constitution amendment bill for GST
November, 24th 2010
The government on Tuesday said it is not possible to fix a time-frame for the introduction of the constitution amendment bill, which will facilitate rolling out the proposed Goods and Service Tax (GST).
In a written reply to the Rajya Sabha, Finance Minister Mr Pranab Mukherjee said the process requires consensus among various players and such an exercise will need time.
Since developing consensus on such issues generally takes time, it is not possible to indicate any time limit by which a decision for introduction of the constitutional amendment bill in the Parliament will be taken, he said.
Mr Mukherjee said a draft constitution amendment bill has been prepared and sent to the Empowered Committee of State Finance Ministers for obtaining their views.
The draft constitutional amendment bill envisages inter-alia, setting up of a GST Council which will recommend to the centre and the states, the tax rates, items to be exempted, registration threshold, etc. EC (Empowered Committee) is yet to revert back with its clear view on the draft, Mr Mukherjee said.
The bill is required because as of now the Centre cannot impose tax beyond manufacturing, and states cannot levy service tax. GST will allow both the centre and states to impose tax on common goods and services separately.
It will subsume excise duty and service tax at the Centres end and value added tax (VAT) on the States front, besides local levies, surcharges and cesses.
In another reply, Mr Mukherjee said a section of the textile industry has sought exemption from the ambit of GST.
He added, however, that the likely impact of the proposed GST to the textile sector cannot be assessed at this stage as the Empowered Committee has not reverted to the centre.
Under the dual GST model proposed by the Empowered Committee of State Finance Ministers and agreed upon by the union government, GST will have two components, viz., Central GST to be levied and collected by the centre and State GST to be levied and coll ected by the states, Mr Mukherjee said.