New Delhi: The Finance Ministry on Tuesday expressed the confidence that Centre and states will reach a broad consensus on the proposed Goods and Services Tax (GST) in the current fiscal year.
"We are quite hopeful of reaching some kind of broad consensus and convergence of views of Centre and States to bring forth GST in the current year. It is going to be a game changer for Centre and more particularly for states," Revenue Secretary Shaktikanta Das said at a CII meeting in Delhi.
Finance Minister Arun Jaitley had discussed GST with states on two occasions since the new government assumed power on May 26.
The GST regime aims at subsuming most of the indirect taxes at the central as well as states' level. The UPA government in 2011 had introduced a Constitution Amendment Bill in the Lok Sabha to pave the way for introduction of GST.
In his Budget speech, Mr Jaitley had said that the debate on whether to introduce GST must come to an end now.
"We have discussed the issue for past many years. Some states have been apprehensive about surrendering tax jurisdiction others want to be adequately compensated," he had said.
Talking about revenue targets for the ongoing fiscal year (2014-15), the secretary said government would be able to achieve direct tax target but the real challenge is with regards to indirect taxes.
"It is a challenge there is no doubt about that but with the number of steps taken by the government to revive the economy particularly manufacturing, reviving investment sentiment...we expect manufacturing sector, the entire industrial sector to get back in buoyant note than previous year," he said.
Government aims to mop up a tax revenue of Rs 13.64 lakh crore during 2014-14 as against Rs 11.58 lakh crore estimated last fiscal year.
The government is faced with a tough task to put back the economy, which expanded at sub-5 per cent for two years in row, back on path of high growth path.
Earlier speaking at the CII event, DIPP Secretary Amitabh Kant said manufacturing in India has badly hit due to lack of predictability and consistency in taxation policy.
"It's not just Vodafone and Nokia but it was in electronic sector - Cisco, IBM and HP all of these. I have just got a letter from my Japanese counterpart that Honda cars' taxation issues has been opened up from 2007 onwards. Every single FDI has impacted by this," Mr Kant said.
However, he added that the new government is committed to provide a predictable and stable tax regime.
Further he said that to put India's economic growth back on track, there is an urgent need to focus on manufacturing, infrastructure and urbanisation.
He said that the government has relaxed FDI norms for defence and construction sector.
Now, industry should come forward and utilise these relaxations which will help in boosting manufacturing, he added.
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