Goods & Services Tax (GST) — the country’s most ambitious tax reform — inched closer to being implemented with finance minister P Chidambaram allocating Rs 9,000 crore as the first tranche of compensation for states for the loss in central sales tax reduction.
This way, he had shown his commitment to the states, Chidambaram said at a press conference. “So now the ball is in the court of the state finance ministers. I hope to be able to meet them shortly. If they are willing to take one step forward, we are willing to take one step forward. If we can forge a consensus, we should have a GST constitutional amendment draft and a GST bill draft in a few months,” he said.
GST has missed several deadlines due to opposition from some states and lack of consensus over the roadmap. But over the past few months, the empowered group of state finance ministers has worked to stitch together a consensus.
“My recent meetings with the committee of state finance ministers has led me to believe that the state governments – or at least the overwhelming majority — are agreed that there is a need for constitutional amendment; there is a need for state governments and the central government to pass a GST law that will be for the Centre to compensate the states for loss due to the reduction in the CST rate,” Chidambaram said in his Budget speech. “I appeal to the state finance ministers to realize the serious intent of the government to introduce GST and come forward to work with the government to bring about a transformational change in the tax structure of the country,” he added.