The much-awaited Goods and Services Tax (GST) will only get implemented after the upcoming general elections, said chairman of Empowered Committee of State Finance Ministers and Bihar’s Deputy Chief Minister, Sushil Modi.
“The Prime Minister has said GST rollout will happen after next general elections. So, they will have to compensate even for 2013-14 … That issue is alive … So many issues need to be ironed out before GST is rolled out,” said Modi in his address to the industry chambers. India Inc has been urging political parties across the spectrum to support an early rollout of the GST regime, which they believe can boost the economy’s growth rate by 1% to 2% immediately.
However, Modi downplayed talks of the rift between the ruling coalition, United Progressive Alliance (UPA) and the opposition group, National Democratic Alliance (NDA) being blamed for the delay.
“The problems facing GST are not NDA Vs UPA. The empowered committee will continue to work to ensure GST is rolled out in 2014-15,” he said, adding that the Centre will have to agree to compensate the states for five years after implementation of the GST, as the states would then incur losses on account of subsuming of most indirect taxes.
“States are saying whenever GST rollout happens then at least for five years the central government should compensate to states whatever losses are there. And that compensation should be through an independent mechanism,” he said.
Last month PM Manmohan Singh had assured that the long-awaited GST regime will be in place in an “appropriate type” by 2014.