Finance Minister Arun Jaitley is keen on early implementation of the Goods and Services Tax (GST) regime and has asked tax officials for a separate presentation on the matter. He has also expressed his desire to hold an early meeting with State finance ministers on GST.
Jaitley’s move is significant as the previous Government had held the Opposition responsible for stalling the Bill’s passage.
The BJP manifesto promised to “bring on board all State governments in adopting GST, addressing all their concerns”.
The GST will replace a number of indirect taxes being levied by the Centre and the State Governments and is intended to remove cascading of taxes and provide a common national market for goods and services. Originally, it was supposed to be introduced from April 1, 2010. But stiff opposition, mainly from BJP-ruled States such as Gujarat and Madhya Pradesh, forced the Centre to defer it. Now, with the BJP at the Centre, there is hope of early implementation.
The previous Government had brought a Constitutional Amendment Bill to introduce the GST, but failed to get it through because of lack of consensus. Now, with the dissolution of the 15{+t}{+h} Lok Sabha, the Bill has lapsed and a new Bill has to be tabled.
Officials said since the basic framework is ready, not much effort is required to re-introduce the Bill. If the new Government does not make major changes, it may not require detailed scrutiny by the Standing Committee. The Government will not have a problem passing the Bill, given its strength in the Lok Sabha.
Although, the ruling coalition is not in a majority in the Rajya Sabha, the Bill is not expected to face any hurdles as the Congress has always supported GST.
Tax collectionBesides the GST, Jaitley also asked revenue officials about the reasons for failure in achieving the tax collection target. The officials, according to sources, attributed the shortfall to moderation in industrial activity and the slowdown in imports.
It may be noted that the government had estimated a gross revenue collection of ₹12.36 lakh crore but later revised it down to ₹11.59 lakh crore.
The meeting also noted that a higher import duty on gold resulted in increased smuggling of the precious metal. Last year, duty was raised to 10 per cent in order to curb the Current Account Deficit. The deficit for 2013-14 is now estimated to be $32.4 billion against $87.8 billion in 2012-13, after which traders have sought easing of curbs.