Asianet NewsableAsianet Newsable

GST stalled again, states and government at an impasse

GST stalled again

 

A panel of state finance ministers on Tuesday failed to reach a consensus that would enable the government to get the Constitutional Amendment Bill for Goods and Services Tax (GST) passed in the Rajya Sabha said a report in The Indian Express.

The crucial revenue neutral rate (RNR) of taxation as well as capping of the GST rate in the Bill did not find favour with many states during a meeting of the Empowered Committee of State Finance Ministers. An RNR of 15-15.5 per cent and a standard GST rate of 17-18 per cent was recommended by a committee headed by Chief Economic Advisor Arvind Subramanian.

“All states were of the view that the tax rates put forward by the Chief Economic Advisor are not acceptable. There was no consensus on what the rate should be. It can be 18 per cent or above that. That was the consensus,” Kerala Finance Minister Thomas Isaac told reporters after the meeting.

Isaac said that the rate should not hurt the common man and must remain beneficial for the revenue of states. “The general consensus was to drop this concept of RNR rate. We will ensure a rate and structure, which will reduce the effective tax burden on the common man…. also, this rate and structure will protect the existing revenues of the Union and the states,” he said.

“On the question of a rate, it was very important that a wording be worked out which essentially means that the incidence of tax on the common man has to be significantly reduced, at the same time, safeguarding the existing level of trends of revenue of the union and states,” said West Bengal Finance Minister Amit Mitra, who is the committee chairman.

On the matter of capping the GST rate, a key demand of the Congress Party, Mitra said there was “consensus to keep the GST rate out of the Constitutional Amendment Bill”.

“As you know, no tax rates are provided in the Constitution. It was discussed and a conclusion reached that the Union Finance Minister will communicate to other parties. He will explain it to them that it can’t come in a Constitutional amendment but in the GST Bill or GST Act,” Mitra said.

 

Follow Us:
Download App:
  • android
  • ios