Arun Jaitley Meets State Ministers, Raises Hopes of Early GST Implementation

Finance Minister Arun Jaitley today met his state counterparts to discuss progress towards the proposed Goods and Services Tax (GST). Raising hopes of early implementation of GST, Empowered Committee Chairman and Jammu and Kashmir Finance Minister Abdul Rahim Rather today said that all states are on board and only some concerns need to be addressed by the Centre.

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The ambitious indirect tax reform could not be passed during the UPA government for want of consensus on different issues. The BJP, in its manifesto, had committed to "bring on board all state governments in adopting GST, addressing all their concerns."

GST would usher in a new indirect tax regime which would subsume levies such as excise, service and local taxes.

"I can't give you exact date but I think it will not take much time. The government of India is very much interested to have this tax reform introduced. Every state is on board," Mr Rather said, when asked as to when the government will be able to roll out the GST.

"Every state wants GST to be implemented. Only they want their concerns are addressed. That will be done I think," Mr Rather said.

Referring to concerns being flagged by various states, Mr Rather said that "there are certain areas of disagreement between the state and the centre like petroleum products. In the Shillong meeting, we had made a consensus that petroleum products should be kept outside GST, it needs to be subsume".

Besides, he said, GST compensation is another issue. The revenue loss to states due to implementation of GST should be compensated by the centre.

"Government of India has said it will give compensation for three years, but it has not agreed to make compensation to make it a part of the constitution through amendment. But states are insisting that compensation should be a part of the constitution amendment so that states get their compensation," he said.

Thirdly, he said entry tax should not be subsumed but government of India as not yet agreed to this as well.

Mr Rather also said that states have also demanded that the centre's tax should go to the divisible tax pool and states should get their share according to the recommendations of the Finance Commission.

Observing that there is broad consensus over GST, he said, in some cases centre has to move a step forward to allay fears of states on revenue loss as the prime concern for them in protection of financial resources.