GST roll-out depends on compensation to states: Sushil Kumar Modi - Business Standard

Bihar deputy chief minister and empowered committee chairman on goods and services tax (GST) Sushil Kumar Modi today said, GST can be implemented within six months if Centre commits to compensate states for initial five years in case of any revenue loss in new tax regime. Citing the issue of compensation by Centre in case of any revenue loss by any state as the key bottleneck in implementation of GST, Modi said, "There has been significant progress. Now we are within the reach of GST. 80% of the issues are resolved. If Centre agrees for compensation, we can shift to GST regime in six months." "It is not that the state will incur revenue loss on account of proposed GST. But there is a genuine concern of the states. To allay fears, Centre should agree to compensate for a period of five years from the time of implementation," he added speaking at an interactive session on GST organised by the Bharat Chamber of Commerce in Kolkata. Although the Centre is considering such a compensation package for states, Modi said, it is yet to give a final commitment.  According to the chief of the Empowered Committee of state finance ministers, there needs to an "independent mechanism" to look after this revenue loss and compensation issues. The government has missed several deadlines  to introduce GST. If implemented, it will subsume most of the indirect central and states taxes, duties and service taxes. Both the states and the union government will impose GST on almost all goods and services produced in India or imported. According to Modi, the parliamentary standing committee on finance is expected to submit its report on the GST Bill in a few weeks. However, he hinted the current UPA government with such a fractured majority may find it difficult to get the concerned constitution amendment bill passed, as it will require a two-third majority. "Once the parliamentary standing committee submits the report, I think, the matter needs to be taken up at a political level. An all-party meeting needs to be convened to discuss the matter," Modi said. However, the Bihar deputy chief minister said there has been a concensus and the GST should come at one go in all states. "No state can opt out from GST, whenever it gets implemented," he added. via Top Stories - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNERuL1o8hLchFpUR5Ton2WuOt6HRw&url=http://www.business-standard.com/article/current-affairs/gst-roll-out-depends-on-compensation-to-states-sushil-kumar-modi-113042700282_1.html

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