FURTHER DELAY IN GST IS POSSIBLE......

CORRIGENDUM : It is to behereby informed that  in our last article the date of the meeting of the Empowered Committee of the State Finance Ministers was by mistake written as Sep 20, 2011 instead of Sep 20, 2010. Now that meeting has already taken place.

The last meeting of the Empowered Committee of the State Finance Ministers which was held to discuss the revised draft of the Constitutional Amendment Bill also failed to produce any fruitful results, as the stand point of the BJP ruled states along with some others remained unchanged .

This meeting has taken place after a one-month’s time  which was given by the Centre to the States  to study the draft of the Constitutional Amendment Bill on GST. Due to this one- month’s time, the Finance Ministry had missed an opportunity to table the draft in the monsoon session of the Parliament, which ended last month. But this extra time given to the States also failed to build any consensus on the revised draft.

However, Mr. Dasgupta has assured that some progress have taken place in this meeting. But the picture which comes out from this meeting speaks and showssome different scenario. Some states wants some more amendments and few others still have a different outlook.

Mr. Pranab Mukherjee efforts towards the implementation of the Goods and Service Tax in the next fiscal also gets a fresh setback from this meeting as the interests of the States in the GST seems to be diminishing with the passage of time.Just about ten State Finance Ministers were turned up for giving their comments on the GST draft whereas this number was around twenty ministers in the previous meeting of the Empowered Committee. However, those states whichfailed to attend the meeting sent their officials for the makeover of their absence.

Recent statements from Mr. Dasgupta suggests that the States concerns are basically for retaining and uploading fiscal autonomy . They also want to retain some flexibility in the system so that if there is any urgent need, states will have to take recourse to additional tax measures. In other words, they are of the view that the States Legislature should be given primacy.

Meanwhile in this meeting, when no consensus is building on the third revised draft of the Constitutional Amendment Bill, Madhya Pradesh suggested alternative GST model in which amendment to the Constitution was not required. But that sounds very indifferent for the other States as instead of focusing on the current draft , they are going on a different path.

The Empowered Commmittee representatives will now meet  Finance Minister Mr. Pranab Mukherjee  to inform him about the suggestions and concerns of each state on the draft . And  in a month’s time they will again meet  with the representatives of the Union Finance Ministry.

Lets see now what our Finance Minister Mr. Pranab Mukherjee have to say about all this but one thing is certain that  being a very complex issue [i.e. GST] , a lot of barriers are still awaiting in its path.