GST rollout set to be delayed again as consensus eludes

PANAJI: A consensus on new indirect tax system GST has eluded delaying its rollout further, as some states in contrast to the Centre's proposal today suggested a new model for the council which will be empowered to make changes in the fresh regime.

At a meeting of the Empowered Committee of State Finance Ministers here, panel chairman Asim Dasgupta floated a proposal that the current committee be enlarged with Union finance minister as its chairman and one of the state finance ministers as vice-chairman for making changes in the indirect tax system.

This is in contrast to the Centre's proposal earlier that a council chaired by the Union finance minister state finance ministers as members be set up and any change in GST be effected if there is a complete consensus.

This was suggested by the Centre after its earlier proposal that the council be empowered to make changes in GST with the approval of Union finance minister and two-third of the council members was rejected by states. They feared a veto power to the Centre over their fiscal autonomy.

"In one approach, states are saying that with a little bit of further revision, we can go ahead... Let us form GST council with union finance minister as chairman and one of the state finance ministers as vice-chairman," Dasgupta told reporters after the meeting.

For establishing this larger committee, only basic amendment to the Constitution would do, some states suggested.

However, sources said the union finance ministry officials were of the view that whatever Constitutional amendment is required should be made fully as there is no point in going for half-baked reforms.

Madhya Pradesh Finance Minister Raghavji, a bitter critic of the Centre's proposal, said, "There is nothing new in today's meeting. First, there has to be a structure of GST. There is no consensus on many things like threshold, purchase tax, rates etc."

Gujarat Finance Minister Saurabh Patel said it is not useful to discuss at this stage constitution amendment unless the issue of autonomy and fiscal flexibility of states are fully addressed.

Many states categorically said that GST has now become a political issue, with Congress-ruled states agreeing with the Centre's proposal and BJP-ruled and other states like Uttar Pradesh differing with it.

"Now, it is more of a political issue. It has to be resolved by senior leaders of all the parties. They (few BJP-ruled states and Uttar Pradesh) are opposing for the sake of opposing. Union Finance Minister should have a dialogue with senior leaders of the Opposition parties," Haryana Finance Minister Ajay Singh Yadav said.