GST implementation faces fresh hurdle

The finance ministers of state governments rejected a draft bill to amend the Constitution for introducing a pan-India goods and services tax (GST) regime from the next fiscal year. The reason for this deadlock is not the GST rates but the role of the Union Finance Minister on the general council body.



"This proposed draft constitutional amendment Bill related to GST in its present form is not acceptable to the States. The states have a problem with the autonomous powers that the union finance minister will get as the chairman of the general council," said Asim Dasgupta, chairman of the Empowered Committee.

Dasgupta explained that the States are apprehensive of infringement on their financial autonomy and therefore had certain reservations on the Bill's provisions for a GST Council and a GST Disputes Authority. The States are of the view that the GST Disputes Authority should not find a place in the constitutional amendment Bill and may be incorporated in GST legislations.

The Finance Minister made a passionate appeal to all political parties to help implement the GST from April next year by supporting the relevant bill to amend the constitution. "It (GST bill) must be introduced in parliament in this session itself. Otherwise it will again be indefinitely delayed, since many states will be going for elections," Mukherjee told the Lok Sabha.

Seeking the cooperation of the Opposition for including even petrol in GST, Mukherjee said that it would help in bringing down volatility in the price of petrol in domestic markets.