Finance Minister P Chidambaram today said that the decision on the implementation of Goods and Services Tax (GST) will be taken by the states. Mr Chidambaram said this after meeting with the members of the Empowered Committee of State Finance Ministers to sort out issues concerning the implementation of GST.
The value-added tax, expected to be implemented by 2013, will replace all indirect taxes levied on goods and services, and is expected to integrate state economies and boost growth.
Further, Mr Chidambaram said the government has decided to set up two committees to address the issues raised by various states in way to the implementation of GST. He said that one of the committees will look into the 'GST design' while the other would take up Central Sales tax (CST) compensation.
While the CST will be abolised once GST comes into force, most states say the government should continue levying CST in the first few years of the implementation of GST.
The Finance Minister said both the committees will be submitting their reports by December 31, 2012. "Initially, officials will be part of both the committees ... later on I will join as the Union Finance Minister," Mr Chidambaram said, adding that till the time he comes into the picture the committees will be headed by the Revenue Secretary.
He said the meeting with the states was very porductive and that it is up to the states to decide on the time line.
Further, Mr Chidmabaram said: "I am convinced that a stable tax regime, moderate tax rates and non-adversarial tax administration and a fair and just dispute settlement machinery which involves tribunals and courts is the best way to raise more money for all that the government wants to do in terms of welfare and investment."
"I am convinced that a stable tax regime, moderate tax rates and non-adversarial tax administration and a fair and just dispute settlement machinery which involves tribunals and courts is the best way to raise more money for all that the government wants to do in terms of welfare and investment," he added.
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