With an aim to give further push to the GST, state finance ministers will meet for two days beginning Friday in Mussoorie to sort out complex issues such as tax rates and list of exemptions under the proposed indirect tax regime. Read what is GST?
The meeting of the Empowered Committee (EC) of State Finance Ministers, to be chaired by Sushil Kumar Modi, will deliberate on the recommendations of reports of three sub-committees on different aspects of the proposed Goods and Service Tax (GST). The sub-committees had representations from the Centre as well as states.
Modi, who is Bihar Deputy Chief Minister and the Finance Minister, said there have been some positive movements towards GST in the recent months and the EC would endeavour to try to address "unresolved" issues.
"There was sort of stagnation on the GST front. However, there have been positive development after P Chidambaram took over the finance portfolio last year," he said.
EC, he said, will deliberate on the revenue neutral rates of GST tax, which would be levied by both the state and the Centre.
"We also deliberate on the list of goods and services which should be exempted from the GST," Modi said.
Another important matter that would be taken up by the state finance ministers is the tax on imported goods.
Modi said they would also deliberate on the threshold limit for registration by businesses for GST.
Besides, the EC would look at ways free traders from the system of dual control of centre and state in addition to issues related with inter-state trade.
There was a standstill on GST talks, as state governments were demanding full compensation from the Centre on account of losses they were suffering due to reduction in Central Sales Tax (CST) rates. The central government collects the CST and distribute among states.
While presenting the Union Budget, Chidambaram said he is taking the "first decisive step" towards GST implementation by setting aside Rs 9,000 crore towards the first instalment of balance of CST compensation.
A Constitution Amendment bill to give affect to GST is pending in Parliament. Both the Centre and state governments are engaged in hectic negotiation for early implementation of the indirect tax regime.