The government is likely to introduce the proposed goods and services tax (GST) system in phases in a bid to bring consensus among states on the new tax regime, Finance Minister Pranab Mukherjee said Tuesday.
“With a view to evolving a consensus we have revised our position to accommodate the concerns of state governments,” Mukherjee said at a seminar organised here by the office of the Comptroller and Auditor General (CAG).“The central government is willing to consider a phased approach for the introduction of GST. In a departure from our earlier stand, as a transitory measure, we are also willing to accept a dual rate structure that could eventually lead to a model GST regime,” he said.
The finance minister said he had taken into account the concerns of the states and would work towards forging a common ground for implementing the proposed tax reforms.
GST is aimed at bringing uniformity in indirect tax structure across the country by replacing state-level value added tax, excise duty and services tax.
Urging state governments to help bring consensus on the implementation of GST, Mukherjee said the new tax regime would benefit the country as a whole and especially the states that are facing resource constraints.
“GST is likely to improve tax collections and boost India’s economic development by integrating the Indian market through a uniform tax rate. It is a win-win situation for all stakeholders.”
The government has set a target to introduce the new tax regime from April 1, 2011. However, the finance minister indicated that the new GST roll out was not possible before 2012.
The GST roll out is likely to miss the second deadline because of reservations on the new tax regime by some states, especially Bharatiya Janata Party (BJP)-ruled states like Gujarat and Madhya Pradesh.
