GST CAN COME EVEN AFTER ITS DEADLINE!!
it has almost become clear that the Goods and Services may not meet its
deadline of April 1,2011 due to lack of consensus among the States and the
Centre. So, we have to wait more for the new tax regime which is expected to
replace excise duty , service tax on the Centre's end
and VAT on the States front, besides local levies ,cesses and
surcharges. The Government failed to tabled the Constitution Amendment Bill in
the monsoon session of the Parliament as the BJP-ruled states raised their
voice against the revised draft of the Centre on the Constitution Amendment
a recent statement by the Finance Ministry indicated that the proposed GST may
still be introduced sometime during 2011-12. GST is a transaction based tax.
It is not necessary to introduce it only at the beginning of the next
financial year. It can be introduced anytime in that year.
original plan of the Finance Ministry for the Goods and Service Tax was to
bring the Constitution Amendment Bill in the monsoon session of the Parliament
and from there it would have been referred to the standing committee. After
all the comments from the parliamentary panel, the bill could have been placed
in the winter session. If it passed in that session , GST legislation could
have been tabled in the Budget Session.
first draft on the Constitution Amendment Bill was rejected by the Empowered
Committee of the State Finance Ministers
because it proposed to give Veto Power to the Union Finance Minister on
the State taxation issues. However, the revised draft from the Finance
Ministry drops the main issue of giving Veto Power to the Union finance
Minister and said that the Council could take a decision only when there is a
the BJP-ruled States along with some of the allies of the UPA, have been
opposing the revised draft of the Constitutional Amendment Bill on GST and
asked for more time to study that and give their views on the various
provisions in the GST Bill . Also, they wanted to know the clear meaning of
the consensus and suggested changing the word with "consent".
order to remove their concerns , the Finance Ministry has prepared a third
draft and a copy of which has already been given to the Empowered Committee
which is now expected to meet on Sep20,2011 to discuss that draft. Now the
Government is looking forward for the comments which would come out from the
upcoming meeting of the Empowered Committee of the State Finance Ministers and
most probably it would also clear the picture of the GST future to some